1999 Commercial HighlightsA small sampling of some United States-based companies and their direct and indirect commercial relationships with non-United States-based companies that have commercial relationships with entities within the Republic of Cuba; and United States-based companies and their direct and indirect commercial relationships with entities within the Republic of Cuba; and other commercial relationships and commercially-relevent matters. OFAC, BXA, AND DEPARTMENT OF STATE STAFF TO HAVE BOOTH AT U.S. HEALTHCARE EXHIBITION- Representatives of the United States Department of State, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury, and Bureau of Export Administration (BXA) of the United States Department of Commerce will share a nine square meter booth at the 25 January 2000 to 29 January 2000 U.S. Healthcare Exhibition in the city of Havana. Mr. Peter W. Nathan, President of Westport, Connecticut-based PWN Exhibicon International LLC, the organizer of the U.S. Healthcare Exhibition, responded positively to the suggestion made by the United States Department of State [see attached letter]. As previously announced, The Honorable Vicki Huddleston, Chief of the United States Interests Section in the city of Havana, Republic of Cuba, will host a reception and briefing on 24 January 2000 at her official residence for exhibitors participating in the U.S. Healthcare Exhibition. More than seventy-five United States-based companies have thus far reserved exhibition space at the U.S. Healthcare Exhibition. The general categories for exhibitors are: Medical equipment, medical instrument, medical supply, medicine, medicated products, pharmaceutical, medical devices, hospital equipment, laboratory equipment, ambulances, physical therapy equipment, medivac equipment, training programs, training materials, and informational materials (including videos, books, etc.). NOTE: Healthcare products used in biotechnological research/production are not eligible. Decatur, Illinois-based Archer Daniels Midland Company (1998 revenues exceeded US$14 billion) is the exclusive vitamin/food sponsor of the U.S. Healthcare Exhibition. Archer Daniels Midland Company (ADM) is the world’s largest producer of natural vitamin E and also produces vitamin C, lecithin (a source of choline which plays an important role in the function of the brain’s neurotransmitters), Isoflavones (a natural component of soybeans), phytosterols, and many other products. Other categories of sponsorships include: Pharmaceutical, Medical Equipment, Travel, Air Carrier, and Air Freight. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., has licensed PWN Exhibicon International LLC to hold an exhibition within the Republic of Cuba to promote the sale of United States-produced healthcare products. Additional information may be obtained on the Internet at http://www.pwnexhibicon.com, by telephone (203) 222-8660, or by facsimile (203) 222-8335. GROUPE BULL ATM’S TO ACCEPT MASTERCARD- Automated Teller Machines (ATM’s) located within the Republic of Cuba are expected to begin accepting Mastercard (the brand being owned by New York City, New York-based Mastercard International) credit cards not issued by United States-based financial institutions. ATM machines within the Republic of Cuba are manufactured by Louveriennes, France-based Groupe Bull and reportedly use software purchased from Canada-based companies. The first ATM was installed in the city of Havana, Republic of Cuba, in 1997 at the office of the Ministry of Transportation of the Republic of Cuba to distribute salaries, and to provide other Peso-denominated services for Republic of Cuba national employees. Convertible Pesos (equal to the U.S. Dollar) can be withdrawn from the majority of the thirty ATM’s located in Havana; from the one ATM located at the resort area of Varadero (140 kilometers east of Havana); from the one ATM located in the city of Matanzas (a few kilometers from Varadero); and from the majority of the six ATM’s located in Moa, Holguin Province (800 kilometers east of Havana). Reportedly, ten of the ATM’s in Havana, and some of the ATM’s located at Moa, are being used exclusively by Republic of Cuba nationals to obtain salaries, social security benefits, and other Peso-denominated services. Visa credit cards (the brand being owned by New York City, New York-based Visa International), Mastercard credit cards, TransCard (issued by Canada-based Transcard, primarily used for family remittances), BFI Card (issued by Republic of Cuba government-operated Banco Financiero Internacional) and the CabalCard credit card (issued by Argentina-based Cabal S.A.) are among the credit cards currently accepted at more than 2,500 locations (airlines, hotels, restaurants, retail stores, vehicle rental, fuel services, etc.) within the Republic of Cuba. Mexico City, Mexico-based Banco Nacional de Mexico S.A. (Banamex), the largest commercial bank in Mexico, has a joint venture with Republic of Cuba government-operated Fincimex S.A. to process receivables and to issue consumer credit and charge cards. The Central Bank of the Republic of Cuba is reportedly negotiating a similar agreement with an unnamed Spain-based financial institution. Fincimex S.A. is currently the exclusive processor of receivables for retail credit card and retail charge card transactions within the Republic of Cuba. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., permits individuals not subject to United States law to use Visa credit cards and MasterCard credit cards for transactions within the Republic of Cuba provided that the Visa credit cards and MasterCard credit cards are not issued by United States-based financial institutions. New York City, New York-based Citibank N.A., a subsidiary of New York City, New York-based Citigroup Inc. (1998 assets exceeding US$500 billion) owns the 250-branch Monterrey, Mexico-based Banco Confia. Individuals not subject to United States law are permitted to use Visa credit cards and Mastercard credit cards issued by Banco Confia for transactions within the Republic of Cuba. Banco Confia is not a United States-based financial institution. Banco Confia is 100% owned by a United States-based financial institution. Citibank S.A. also owns the 104-branch Buenos Aires, Argentina-based Banco Mayo Cooperativo, which issues Visa credit cards and Mastercard credit cards. U.S. HEALTHCARE
EXHIBITORS PERMITTED TO DISTRIBUTE SAMPLES- The Bureau of Export Administration
(BXA) of the United States Department of Commerce in Washington, D.C.,
has authorized participants in the U.S. Healthcare Exhibition (25 January
2000 to 29 January 2000) in the city of Havana to distribute samples of
their products to attendees. The definition of “attendees” as provided
by the BXA includes: officials of the government of the Republic of Cuba,
members of non-governmental organizations (e.g., charitable or religious
organizations) and other individuals not affiliated with the government
of the Republic of Cuba, and Republic of Cuba nationals. [See attached
photocopy of 13 December 1999 letter from the BXA]. Exhibitors will
require a license (complete form BXA-748P) from the BXA for such distribution.
The BXA will authorize the distribution of the following “free of charge”
and “in usual and customary quantities”:
CHASE MANHATTAN BANK SUBSIDIARY IS NOMINEE FOR WESTERN MINING CORPORATION SHARES- A subsidiary of Sydney, Australia-based Chase Manhattan Bank Australia (CMBAL), Sydney, Australia-based Chase Manhattan Nominees Ltd. (CMN), an indirect wholly-owned subsidiary of New York City, New York-based Chase Manhattan Corporation (1998 assets exceeding US$350 billion), has served since 1988 as the nominee (custodian) for outstanding shares of Melbourne, Australia-based Western Mining Corporation (WMC). The current holdings by CMN in WMC is 7.66%, valued approximately US$200 million. In 1997, Republic of Cuba government-operated Caribbean Nickel S.A. (under the auspice of the Ministry of Basic Industry of the Republic of Cuba) signed a joint venture agreement valued at US$650 million with Melbourne, Australia-based Westminer Holdings Ltd., a subsidiary of WMC, to construct a nickel plus cobalt plant and refinery in the Pinares de Mayari area of Holguin Province. The venture, in which WMC holds 65% of the shares, has yet to begin construction due to previously low nickel prices and a lack of financing. The total value of the assets of CMN is reported as approximately US$70 billion. Individual entities (corporations) using the services of CMN normally have a minimum asset value of US$100 million placed with CMN. WMC has American Depository Receipts (ADR’s) listed on the New York City, New York-based New York Stock Exchange (NYSE). According, to CMBAL, individuals subject to United States law may use the services of CMN. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. authorizes companies subject to United States law to have a non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba. [OFAC 4 March 1994]. GRAND HYATT HONG KONG IS LOCATION OF PACIFIC CIGAR COMPANY EVENT- On 25 November 1999, Hong Kong, People’s Republic of China-based Grand Hyatt Hong Kong was the location of a gathering (cigar fashion show) hosted by Hong Kong, People’s Republic of China-based Pacific Cigar Company, the exclusive distributor of Republic of Cuba-produced cigars within countries on the Asian continent. The Grand Hyatt Hong Kong is managed by Chicago, Illinois-based Hyatt Hotels & Resorts (1998 revenues exceeded US$3 billion). The Grand Hyatt Hong Kong is owned by Hong Kong, People’s Republic of China-based New World Development Limited. Hyatt Hotels & Resorts has been permitted by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to own and to manage the Park Hyatt Toronto, a US$75 million property located in Toronto, Canada, that had a Casa del Habano retail cigar store on the premises (with a multi-year lease) when Hyatt Hotels & Resorts first evaluated the property for purchase. Republic of Cuba government-operated Habanos S.A., the exclusive distributor of Republic of Cuba-produced cigars, owns the Casa del Habano retail cigar store franchise, of which there are approximately 69 located throughout the world. Habanos S.A. owns 100% of some of the Casa del Habano retail cigar stores (mainly those located within the Republic of Cuba), has an equity interest in others, and in others has no equity interest, only receiving a franchise fee. In April 1998, the 798-room Sheraton Hong Kong Hotel & Towers opened a Casa del Habano retail cigar store in the property. White Plains, New York-based Starwood Hotels & Resorts Worldwide, Inc. (1998 revenues exceeded US$4 billion), owns Sheraton, Westin, Four Points, St. Regis/The Luxury Collection, W Hotels, and Ciga. The Sheraton Hong Kong Hotel & Towers is “partially-owned” Sheraton. Bala Cynwyd, Pennsylvania-based Tinder Box International, Ltd., which owns the Tinder Box brand name, has a franchisee located in Winnipeg, Canada, which sells Republic of Cuba-produced tobacco products. According to Tinder Box International, Ltd., approximately 75% of the tobacco products sold in the Winnipeg, Canada, retail store are of Republic of Cuba origin. Tinder Box, Inc., has two company-owned retail stores within the United States and 128 franchisee-owned retail stores within the United States; and a franchisee-owned retail store will be operational by December 1999 in Santiago, Chile. Franchisees pay Tinder Box International, Ltd., a one-time franchise fee of US$30,000.00 and between 4% and 5% of gross revenues per Tinder Box retail store under a ten-year franchise agreement. Tinder Box International, Ltd., provides advertising support to franchisees. The Nassau Marriott Resort and Crystal Palace Casino located in Nassau, the Bahamas, has featured a nightly one hour and forty-five minute joint performance offering a musical review of Cuban culture and Bahamian culture by 38 Republic of Cuba nationals and 22 Bahamian nationals. The Nassau Marriott Resort and Crystal Palace Casino is managed by Washington, D.C.-based Marriott International, Inc. (1998 revenues exceeded US$8 billion), which operates 1,300 properties in 56 countries. The Nassau Marriott Resort and Crystal Palace Casino is owned by Wichita, Kansas-based Mr. Philip Ruffin. The Wyndham Aruba Beach Resort & Casino, which is managed by Dallas, Texas-based Wyndam International, Inc., has hosted a nightly show, “An Evening In Havana- No Passport Required.” The owner of the Wyndham Aruba Hotel & Casino is a Venezuela-based company. The Wyndham Aruba Hotel & Casino has compensated Republic of Cuba government-operated Artex S.A., which, in turn, has compensated the performers who are Republic of Cuba nationals. PAM SHRIVER, ZENA GARRISON, DR. “PATCH” ADAMS, MILWAUKEE SYMPHONY VISIT CUBA- Professional tennis players, Ms. Pam Shriver and Ms. Zena Garrison, visited the Republic of Cuba on 15 December 1999 and 16 December 1999 under a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. The purpose of the visit was to hold an exhibition match with Republic of Cuba nationals as partners and to host a series of tennis clinics. Other visitors last week included Dr. Hunter “Patch” Adams, known within the United States as the “Doctor of Laughs” for his use of clowns and humor with pediatric patients, along with a 103-member healthcare delegation. The actor Mr. Robin Williams played the role of Dr. Adams in a recent motion picture. And, the Milwaukee Symphony Orchestra visited the Republic of Cuba, becoming the first major United States-based symphony orchestra to perform in the Republic of Cuba since 1959. Milwaukee, Wisconsin-based Briggs & Stratton Corporation (1998 revenues exceeding US$1 billion) contributed US$25,000.00 to be a sponsor of the Milwaukee Symphony Orchestra’s visit to the Republic of Cuba. Briggs & Stratton Corporation manufactures and sells components for original equipment manufacturers, namely gasoline engines for outdoor powered equipment. LEISURE CANADA
TRADING ON CANADIAN VENTURE EXCHANGE- North Vancouver, Canada-based
leisure Canada, Inc. (CDNX:LCN) reported that on 29 November 1999 the
common shares of Leisure Canada Inc. commenced trading on the Canadian
Venture Exchange (CDNX) and was de-listed from the Canadian Dealer Network.
Leisure Canada, Inc., through its North Vancouver, Canada-based Wilton
Properties subsidiary, plans to invest approximately US$400 million to
develop within the Republic of Cuba hotels, marinas, golf courses, equestrian
riding centers, cruise ship facilities, tennis courts, convention centers,
health spas, retail facilities, and eco-tourism facilities in through
a joint venture with Republic of Cuba government-operated Gran Caribe
S.A., one of the three largest Republic of Cuba government-operated tourism
companies. Construction is expected to begin in January 2000 at
Jibacoa, a 5.5 square kilometer waterfront property located 65 kilometers
east of the city of Havana on the coast highway, midway between Havana
and the resort area of Varadero, 140 kilometers east of Havana.
In 1997, then San Francisco, California-based BancAmerica ROBERTSON STEPHENS
Investment Management, an investment banking company with assets of US$2
billion specializing in emerging growth companies, purchased a 26.2% (fully
diluted) investment in Leisure Canada. The investment was made through
a registered offshore fund, ROBERTSON STEPHENS Orphan Fund, located on
Grand Cayman, Cayman Islands. BancAmerica ROBERTSON STEPHENS Investment
Management announced in November 1998 that it was being purchased by a
group of investors, which included the company's original founders.
BancAmerica ROBERTSON STEPHENS has since changed its name to BancBoston
Robertson Stephens, Inc., and is a wholly owned subsidiary of Boston,
Massachusetts-based FleetBoston Financial. The Office of Foreign
Assets Control (OFAC) of the United States Department of the Treasury
in Washington, D.C. authorizes companies subject to United States law
to have a non-controlling investments in third country companies that
have commercial activities within the Republic of Cuba provided that the
investments do not result in control in fact of the third country company
and provided that a majority of the revenues of the third country company
are not produced from commercial activities within the Republic of Cuba.
[OFAC 4 March 1994]. Other investors in Leisure Canada include Paris,
France-based Societe General and Paris, France-based LCF Rothschild.
Leisure Canada reports no current revenues from operations within the
Republic of Cuba, but expects that within the next two years more than
51% of its revenues will be from operations within the Republic of Cuba.
In February 1999, Leisure Canada, Inc., announced the appointment of Mr.
Simon F. Cooper as a member of the Board of Directors. Mr. Cooper
is President of Toronto, Canada-based Marriott Lodging Canada and is Senior
Vice President-Lodging, Canada Region for Washington, D.C.-based Marriott
International, Inc. (1998 global revenues exceeding US$9 billion).
Undisclosed is whether Mr. Cooper and/or Marriott International, Inc.,
has now or plans to have a financial interest in Leisure Canada.
Mr. Cooper previously served as President and Chief Operating Officer
of Toronto, Canada-based Delta Hotels and Resorts (a subsidiary of Calgary,
Alberta, Canada-based Canadian Pacific Limited), which had managed properties
within the Republic of Cuba, but in 1998 ceased all activity within the
Republic of Cuba. Leisure Canada and Paris, France-based Meridien
Gestion SA (a subsidiary of London, United Kingdom-based Forte Hotels
which itself is a subsidiary of London, United Kingdom-based Granada Group
Plc) which manages Le Meridien Hotels & Resorts have an agreement
to develop the Le Meridien Village in Jibacoa. The new development
will be similar to the Forte Village located in Sardinia, Italy, reportedly
the company's most profitable property. Forte Hotels manages more
than 400 properties with a combined 54,000 rooms worldwide. Le Meridien
Hotels and Resorts manages more than 90 properties with a combined 24,000
rooms worldwide. Le Meridien Hotels and Resorts will assist in the
"design, development, and mangement" of three properties in Jibacoa.
In November 1998, Meridien Gestion S.A. signed a Letter of Intent with
Leisure Canada whereby Meridien Hotels and Resorts would manage and, perhaps,
have an equity interest in, five hotels with a combined 1,000 rooms.
The Letter of Intent stated that the initially agreed three hotels would
be in operation within 30 months of a final signed agreement between Meridien
Gestion S.A. and Leisure Canada. Leisure Canada, Inc. and PGAGM
have a joint venture agreement to establish professional golf within the
Republic of Cuba by assisting in the organization of amateur golf within
the Republic of Cuba through the development of PGA of the United Kingdom
and Ireland golf academies to provide for the coaching of amateur golfers
and professional golfers and for the training of both amateur golfers
and professional golfers. The joint venture will merchandise the
PGA of the United Kingdom and Ireland brand and market media rights.
Established in 1992, PGAGM (which shares a similar name but is not controlled
by Palm Beach Gardens, Florida-based PGA of America) is a subsidiary company
of the PGA of the United Kingdom and Ireland, the oldest professional
golf association in the world. Ponte Vedra Beach, Florida-based
PGA tour is also not affiliated with the PGA of the United Kingdom and
Ireland. The PGA of the United Kingdom and Ireland, and/or the PGA
of any other country, the PGA tour in U.S. HEALTHCARE
EXHIBITORS PERMITTED BY BXA TO STORE PRODUCTS IN CUBA- The Bureau
of Export Administration (BXA) of the United States Department of Commerce
in Washington, D.C., has authorized participants in the U.S. Healthcare
Exhibition (25 January 2000 to 29 January 2000) in the city of Havana
to store their products after the completion of the U.S. Healthcare Exhibition
at a secured warehouse (building M1) located in the Wajay Zona Franca
(Free Trade Zone) adjacent to the Jose Marti International Airport in
Havana. A representative of the United States Interests Section
in Havana, Republic of Cuba, had visited the facility on three occasions
before final authorization was granted. Westport, Connecticut-based
PWN Exhibicon International LLC, the organizer of the U.S. Healthcare
Exhibition, secured the storage authorization at a substantial discount
(reduced 66%) on storage fees to make cost-effective the transportation
of healthcare products by exhibitors to the Republic of Cuba toward increasing
sales opportunities for those healthcare products. Exhibitors
will not need return exhibited products to the United States prior to
any consummated sale to authorized entities within the Republic of Cuba.
In addition, exhibitors may arrange storage for any products that will
be donated to authorized entities within the Republic of Cuba. The
25,000 square foot air-conditioned warehouse was completed in September
1999 and was constructed with materials imported from Canada. The
warehouse is managed by Toronto, Canada-based P.I. Di Luca & Associates,
the company that also constructed the building. The landlord of
building M1 is Caribe-Euro International Holdings, Inc., a joint venture
between P.I. Di Luca & Associates and Udine, Italy-based Caribe-Euro
Holdings, Inc. The coordination of product storage services for
the U.S. Healthcare Exhibition is being provided by the Havana, Republic
of Cuba, office of Mississauga, Canada-based WLVW Logistics GMBH, exclusive
agent for Osnabruck, Germany-based Hellmann Worldwide Logistics, Inc.
(1998 revenues exceeding US$2 billion and 15,000 employees worldwide).
WLVW Logistics GMBH is a tenant in building M1. Hellmann Worldwide
Logistics, Inc., is a 100% family-owned company established in 1871 by
Mr. Carl Hellmann as a local horse-drawn delivery service. Currently,
Hellmann Worldwide Logistics, Inc., has offices in more than 368 cities
in 128 countries. Miami, Florida-based Hellmann Worldwide Logistics,
Inc., was established in 1988, and has 18 offices throughout the United
States. The Wajay Free Trade Zone is managed by Almacenes Universales
S.A., a subsidiary of the Revolutionary Armed Forces of the Republic of
Cuba.
HELLMANN WORLDWIDE LOGISTICS TO TRANSPORT 10,000 CONTAINERS FROM CANADA TO CUBA IN 1999- Mississauga, Canada-based WLVW Logistics GMBH, exclusive agent for Osnabruck, Germany-based Hellmann Worldwide Logistics, Inc. (1998 revenues exceeding US$2 billion and 15,000 employees worldwide) reported that the company would serve as freight forwarder for 10,000 20-foot containers to the Republic of Cuba in 1999. Overall exports from Canada to the Republic of Cuba include wheat, corn, feed grain, meat, vegetables, dairy, wood, fertilizers, metal, machinery, vehicles, and consumer goods. WLVW Logistics GMBH reports that there continues to be a substantial lack of containers being shipped from the Republic of Cuba to Canada. Overall exports from the Republic of Cuba to Canada include sugar, seafood, ores (largest category), and textiles; tobacco is transported by air carriers. Hellmann Worldwide Logistics, Inc., is a 100% family-owned company established in 1871 by Mr. Carl Hellmann, has grown from a local horse-drawn delivery service to a global freight forwarder with offices on five continents. Currently, Hellmann Worldwide Logistics, Inc., has offices in more than 368 cities in 128 countries. Miami, Florida-based Hellmann Worldwide Logistics, Inc., was established in 1988, and has 18 offices throughout the United States. For additional information contact telephone (905) 564-6621 or facsimile (905) 564-2985. UNITED STATES COMPONENT TO CRUISE SHIP ARRIVIALS- The Ministry of Tourism of the Republic of Cuba reported that passenger cruise ships would transport approximately 25,000 tourists to the Republic of Cuba during the 1999-2000 season (December-April), compared to approximately 20,000 tourists to the Republic of Cuba during the 1998-1999 season. The estimate for the 1999-2000 season is reportedly lower than planned. Six passenger cruise ships are scheduled to visit ports within the Republic of Cuba, including the 1,257-passenger Sundream, owned by London, United Kingdom-based Airtours plc. Miami, Florida-based Carnival Corporation (1998 revenues exceeding US$1 billion) owns approximately 26% of Airtours plc. DONALDSON, LUFKIN & JENRETTE HAS INVESTMENT IN CUBA-RELATED INSURANCE COMPANY- A subsidiary of New York City, New York-based Donaldson, Lufkin & Jenrette (1998 assets exceeding US$50 billion) will be one of the owners of the newly-established London, United Kingdom-based HLF Insurance Holdings (which will have revenues of approximately US$400 million and a presence in forty-one countries). HLF Insurance Holdings, will reportedly become the sixth-largest insurance brokerage in the world. Donaldson, Lufkin & Jenrette is a subsidiary of New York City, New York-based The Equitable Companies Incorporated (1998 assets exceeding US$150 billion) which is a subsidiary of Paris France-based AXA SA. Approximately three years ago, Donaldson, Lufkin & Jenrette purchased London, United Kingdom-based Phoenix Partnership (now known as DLJ Phoenix). In March 1999, DLJ Phoenix established DLJ Phoenix Private Equity Limited, a venture capital fund with non-United States-based investors and United States-based investors. HLF Insurance Holdings will be created from the merger of London, United Kingdom-based Lambert Fenchurch PLC and London, United Kingdom-based Heath Group. The new company will have a substantive market position in marine insurance, aviation insurance, protection and indemnity insurance, reinsurance, international construction insurance, professional indemnity insurance, kidnap and ransom insurance, and fine arts insurance. In November 1998, Lambert Fenchurch PLC, a broker for London, United Kingdom-based Lloyds of London, signed an agreement with Republic of Cuba government-operated National Bank of Cuba, whereby Lambert Fenchurch PLC agreed to serve as guarantor (as a broker) for US$100 million in trade credits. The agreement, a form of political risk insurance, was to permit Republic of Cuba government-operated companies to obtain financing for trade and investments, and result in lower interest rates (currently between 14% and 22% on an annual basis). Thus far, none of the funds have been made available due to existing financial obligations to third countries by the National Bank of Cuba having yet to be resolved. London, United Kingdom-based Lambert Fenchurch Marine Group Limited, through its Hull and Liability Division, provides insurance for much of the Republic of Cuba’s maritime shipping activity. Prior to the merger with Heath Group, Lambert Fenchurch PLC reported that it was the 4th-largest insurance brokerage in the United Kingdom and the 8th-largest insurance brokerage in the world. NEW YORK CITY TO HAVANA CHARTER FLIGHTS UPDATE- Hialeah, Florida-based Marazul Charters, Inc., is scheduled to begin nonstop airline charter services between John F. Kennedy International Airport in New York City and the city of Havana, Republic of Cuba, on 3 December 1999. Marazul Charters, Inc., also has an office in Weehawken, New Jersey. Individuals subject to United States law who are representatives of United States-based companies are permitted to travel on these charter flights (and the existing charter flights operating from Miami International Airport in Miami, Florida) provided that they obtain a specific license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury. Any individual subject to United States law traveling to the Republic of Cuba under a general license (no specific documentation from the OFAC is required) or specific license issued by the OFAC is permitted to travel on these charter flights. However, individuals subject to United States law traveling to the Republic of Cuba under the “fully hosted” general license provision are not permitted to travel on these charter flights. The US$629.00 roundtrip, 3½ flight will initially operate once per week, departing approximately 10:00 p.m., with the returning flight departing Havana’s Jose Marti International Airport at approximately 3:00 a.m. The flights will use a 150-passenger Blagnac Cedex, France-based Airbus Industrie-manufactured A-320 aircraft operated by San Salvador, El Salvador-based Grupo Taca (TACA International of El Salvador, TACA de Honduras, Aviateca of Guatemala, LACSA of Costa Rica, COPA of Panama, and NICA of Nicaragua). In March 1998, Grupo Taca established INTER-CUBA with Republic of Cuba government-operated ENSA, a subsidiary of the Instituto Aeronautica Civil de Cuba (IACC), to operate14-passenger Cessna Grand Caravan 208B aircraft with Costa Rica nationals serving as crews. The Cessna Aircraft Company, which is located in Wichita, Kansas, is a subsidiary of Rhode Island-based Textron, Inc. (1998 revenues exceeding US$10 billion). INTER-CUBA provides services between Havana, Varadaro, Cayo Coco, Trinidad, Cayo Largo, and Gerona. The OFAC has also approved nonstop airline charter services between Los Angeles International Airport in Los Angeles, California, and Havana. To date, there has yet to be adequate passenger demand to make such flights profitable for a United States-based company to operate. OWNER OF MINNESOTA TWINS BASEBALL TEAM GIVES US$100,000.00 FOR COLLEGE GAME- Minneapolis, Minnesota-based Carl and Eloise Pohlad Family Foundation (1998 assets of US$14 million) has given a project grant in the amount of US$100,000.00 to the St. Paul, Minnesota-based University of St. Thomas to substantially finance a series of baseball games between Republic of Cuba government-operated baseball teams and college-level baseball teams from the Minneapolis/St.Paul area. In January 2000, a baseball team from the University of St. Thomas is expected to travel to the Republic of Cuba to play against teams from 1) Instituto Superior Politecnico Jose Antonio Echevervia and 2) University of Havana. There would then be reciprocal baseball games played in Minnesota in the spring of 2000. The University of St. Thomas baseball team finished in second place in 1999 NCAA Division III. Mr. Pohlad owns the Major League Baseball franchise team, Minnesota Twins. BXA INCLUDES U.S. HEALTHCARE EXHIBITION ON INTERNET- The Bureau of Export Administration of the United States Department of Commerce in Washington, D.C., has included a four-page guidance about the U.S. Healthcare Exhibition on the Internet at http://www.bxa.gov under the section “The News from BXA.” More than fifty United States-based companies have thus far reserved exhibition space at the U.S. Healthcare Exhibition scheduled for 25 January 2000 to 29 January 2000 in the city of Havana. The general categories for exhibitors are: Medical equipment, medical instrument, medical supply, medicine, medicated products, pharmaceutical, medical devices, hospital equipment, laboratory equipment, ambulances, physical therapy equipment, medivac equipment, training programs, training materials, and informational materials (including videos, books, etc.). NOTE: Healthcare products used in biotechnological research/production are not eligible. Decatur, Illinois-based Archer Daniels Midland Company (1998 revenues exceeded US$14 billion) is the exclusive vitamin/food sponsor of the U.S. Healthcare Exhibition. Archer Daniels Midland Company (ADM) is the world’s largest producer of natural vitamin E and also produces vitamin C, lecithin (a source of choline which plays an important role in the function of the brain’s neurotransmitters), Isoflavones (a natural component of soybeans), phytosterols, and many other products. Other categories of sponsorships include: Pharmaceutical, Medical Equipment, Travel, Air Carrier, and Air Freight. The Honorable Vicki Huddleston, Chief of the United States Interests Section in the city of Havana, Republic of Cuba, will host a reception and briefing on 24 January 2000 at her official residence for exhibitors participating in the U.S. Healthcare Exhibition. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., has licensed Westport, Connecticut-based PWN Exhibicon International L.L.C., to hold an exhibition within the Republic of Cuba to promote the sale of United States-produced healthcare products. Additional information may be obtained on the Internet at http://www.pwnexhibicon.com, by telephone (203) 222-8660, or by facsimile (203) 222-8335. SMITHLKINE BEACHAM MAY SEEK TO MARKET ADDITIONAL CUBA HEALTHCARE PRODUCTS- Brentford, United Kingdom-based SmithKline Beacham plc (1998 revenues exceeding US$10 billion) plans to evaluate additional products produced by Republic of Cuba government-operated Carlos Finlay Institute and other Republic of Cuba government-operated healthcare products research facilities. Smithkline Beecham and its United States-based subsidiary, Philadelphia, Pennsylvania-based SmithKline Beacham, received a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., authorizing SmithKline Beacham to enter into an agreement with Carlos Finlay Institute for testing, clinical trials, and marketing of a Meningitis B vaccine developed by the Carlos Finlay Institute in 1985. Since SmithKline Beacham owns the Brussels, Belgium-based facility where the testing and clinical trials will be held, an OFAC license was required. SmithKline Beacham currently markets vaccines to prevent Meningitis A and to prevent Meningitis C. Carlos Finlay Institute could eventually receive US$10 million to US$20 million from SmithKline Beecham plc for a five-year exclusive right to market the vaccine. Under the terms of the OFAC license, during the testing and clinical trial stages, SmithKline Beacham will compensate Carlos Finlay Institute in the form of healthcare products and food products equal to the U.S. Dollar value of the compensation. If the Meningitis B vaccine is marketed, SmithKline Beacham will then make royalty payments to Carlos Finlay Institute in U.S. Dollars or their equivalent. Approximately 1,000 United States citizens contract Meningitis B each year, of which 120 die. The Honorable Arlen Specter (R-Pennsylvania) visited the Republic of Cuba from 2 June 1999 to 3 June 1999, where he met with representatives of the Ministry of Public Health of the Republic of Cuba and visited the Carlos Finlay Institute. Senator Specter said that “Cuba can benefit from the research of the National Institutes of Health [NIH] and we can benefit from the research [the Cubans] are doing in meningitis B, for example.” He said that a meeting would be requested with The Honorable Donna Shalala, United States Secretary of Health and Human Services, to discuss opportunities for bilateral cooperation in public health matters. Senator Specter is the Chairman of the Subcommittee on Labor, Health and Human Services, Education, and Related Agencies of the Committee on Appropriations of the United States Senate. Also supporting the OFAC license application request by SmithKline Beacham were from the United States Senate: The Honorable Christopher Dodd (D-Connecticut) and The Honorable Richard Lugar (R-Indiana), among others; and from the United States House of Representatives: The Honorable Tom DeLay (R-Texas), The Honorable Sonny Callahan (R-Alabama), The Honorable Joseph McDade (R-Pennsylvania), The Honorable James Greenwood (R-Pennsylvania), The Honorable Nancy Pelosi (D-California), The Honorable Henry Waxman (D-California), and The Honorable Howard Berman (D-California) among others. ILLINOIS GOVERNOR
VISITS CUBA ON “HUMANITARIAN” LICENSE FROM THE OFAC- The Honorable
George H. Ryan (R), Governor of the State of Illinois, is visiting the
Republic of Cuba from 23 October 1999 to 27 October 1999 under a license
from the Office of Foreign Assets Control (OFAC) of the United States
Department of the Treasury in Washington, D.C. Governor Ryan is
the first serving governor to visit the Republic of Cuba since the 1959
revolution. From 14 September 1999 to 17 September 1999, Mr. Robert
Newtson, Chief of Staff to Governor Ryan and Mr. Joseph Hannon, Managing
Director- International Business, of the State of Illinois Department
of Commerce and Community Affairs, visited the Republic of Cuba to prepare
for the visit of Governor Ryan to the Republic of Cuba. Governor
Ryan is delivering approximately US$1 million in value of donated products
including educational materials and healthcare products. Although
the officially stated reason for the visit is “humanitarian,” the original
purpose and the current purpose of the visit is to identify opportunities,
to solidify existing relationships, and to expand existing relationships
for Illinois-based companies, educational institutions, philanthropic
organizations, cultural organizations, and religious groups. Individually,
each of the members of the delegation could have obtained licenses from
the OFAC to visit the Republic of Cuba for specifically commercial reasons
(agricultural products and healthcare products being two of many categories
of exports permitted to the Republic of Cuba), for specifically cultural
reasons, for specifically religious reasons, for specifically educational
reasons, for specifically journalist reasons, for specifically philanthropic
reasons, or for specifically humanitarian reasons. This visit
also the first occasion that the OFAC has permitted a spouse (the wife
of the governor) to participate where the spouse has no specific function
that would generally be considered to be licensable by the OFAC.
Several years ago, the wife of the president of a United States-based
television network was denied a license by the OFAC to visit the Republic
of Cuba with her husband. Elk Grove Township, Illinois-based
United Airlines, Inc. (1998 revenues exceeded US$17 billion) provided
the aircraft which is transporting the delegation. United Airlines
aircraft have been chartered by Miami, Florida-based Airline Broker Companies,
Inc. (ABC), for use in regularly-scheduled aircraft charters between the
United States and the Republic of Cuba. Representatives of companies
reported to be participating in the visit include: 1) Mr. Allen
Andreas, Chairman and Chief Executive Officer of Decatur, Illinois-based
Archer Daniels Midland Company (1998 revenues exceeded US$16 billion)
2) Mr. Richard Reising, Senior Vice President of Archer Daniels
Midland Company 3) Mr. Jorge Guerra, Vice President, Regional Business
Practice Committee of Deerfield, Illinois-based Baxter International (1998
revenues exceeded US$6 billion) Mr. Dough Crew, Manager- Government Affairs,
Peoria, Illinois-based Caterpillar Inc. (1998 revenues exceeded US$20
billion) and 4) Mr. William Sand of the Moline, Illinois-based
John Deere Foundation affiliated with Deere & Company (1998 revenues
exceeded US$13 billion). Governor Ryan is expected to visit
healthcare facilities (genetic research and biotechnological research),
agricultural facilities (farm and cattle research facility), churches,
museums, schools (University of Havana), various officials of the government
of the Republic of Cuba, and Republic of Cuba nationals who oppose commercial,
economic, and political policies of the government of the Republic of
Cuba. The forty-five member delegation includes:
CIBC MELLON TRUST IS TRANSFER AGENT FOR CANADA COMPANY WITH CUBA ASSETS- Toronto, Canada-based CIBC Mellon Trust Company, a subsidiary of Pittsburgh, Pennsylvania-based Mellon Bank Corporation (1998 assets managed exceeding US$200 billion) is the Transfer Agent and Registrar for Vancouver, British Columbia, Canada-based Commercial Consolidators Corp. (CCZ: Vancouver Stock Exchange), a company which distributes business products and equipment. Commercial Consolidators Corp. was incorporated on 4 May 1998 in Alberta, British Columbia, Canada. CIBC Mellon Trust Company also is the Transfer Agent and Registrar for Calgary, Canada-based Beau Canada Exploration Ltd., whose subsidiary, Calgary, Canada-based Genoil, Inc., has explored for oil within the Republic of Cuba. WALT DISNEY COMPANY TO ESTABLISH RESTAURANT WITH CUBA MANAGEMENT HISTORY- Burbank, California-based The Walt Disney Company (1998 revenues exceeded US$22 billion) reported that a 600-seat tapas restaurant will be established at The Disneyland Resort in Anaheim, California. According to a media release from The Walt Disney Company, “Y Arriba Y Arriba,” will feature tapas, the snack-sized dishes that are a favorite throughout the Latin world, while the teatro will feature live entertainment including concerts by Latin stars of today and tomorrow. “Y Arriba Y Arriba” is the latest milestone in the world of Latin dining and entertainment for the Cachaldora/Currais family - a journey that started in Cuba nearly 200 years ago when their ancestors arrived from Spain and opened their first restaurant. The family's most recent success has been Club Tropigala, the world-famous Latin supper club in the heart of Miami Beach. The Currais family established La Zaragozana, the historic first family restaurant in Cuba. “Y Arriba Y Arriba” will showcase the varied cultures, countries and history of the Latin world. The restaurant's decor will feature interesting and intriguing Latin paintings, sculpture and crafts. The 18,000-square-foot entertainment center will have several bars and a coffee area, as well as a branded merchandise sales facility, where patrons can purchase t-shirts, caps and a variety of other items. “Y Arriba Y Arriba” will capitalize on the rapid demographic growth of Hispanics in the United States. By the year 2020, Hispanics are expected to be 18 percent of the total population, making the U.S. the second biggest Latin nation behind Mexico. In Los Angeles and Miami, Hispanics already represent more than 35 percent of the population. Nation's Restaurant News recently identified Latin foods as "ready for meteoric growth in the U.S." -- a trend that will clearly benefit “Y Arriba Y Arriba.” On 19 July 2000, the United States National Soccer Team is scheduled to play an exhibition match in the Republic of Cuba which is expected to be broadcast by Bristol, Connecticut-based ESPN, Inc., which is 80% owned by The Walt Disney Company and 20% owned by New York City, New York-based The Hearst Corporation (1998 revenues US$2 billion). On 28 March 1999, ESPN broadcast the Baltimore, Maryland-based Baltimore Orioles Major League Baseball Team exhibition baseball game against the Republic of Cuba government-operated National Team, which the Baltimore Orioles won by a score of 3 to 2, at the 50,000-seat Estadio Latinamericanos Stadium in the city of Havana. ESPN broadcast the exhibition baseball game and paid the government of the Republic of Cuba what the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., described as “normal and reasonable” fees. United States-based companies advertising on ESPN during the baseball exhibition game included: General Motors Corporation, Suzuki, Sprite, MCI WorldCom, MetLife, Roundup, Range Rover, Head and Shoulders shampoo, 10-10-321 long distance telephone service, Little Caesars, and Advil among others. Miami, Florida-based WPLG-TV, an affiliate of New York City, New York-based ABC, Inc. (which is owned by The Walt Disney Company), simulcast the baseball game with ESPN. WPLG-TV reported that it did not pay any fees to the government of the Republic of Cuba for rights to broadcast the baseball game. The Anaheim, California-based Anaheim Angeles Major League Baseball Team, which is owned by The Walt Disney Company, is seeking a license from the OFAC to play an exhibition baseball game in the city of Havana. The Walt Disney Company has many subsidiaries, including: 1) Hollywood Records (the OFAC permits the exportation of music product from the United States to the Republic of Cuba for distribution within the Republic of Cuba and the OFAC permits the importation of existing music product from the Republic of Cuba for distribution within the United States). 2) Disney Channel (the OFAC permits the exportation of television product and motion picture product from the United States to the Republic of Cuba for distribution within the Republic of Cuba and the OFAC permits the importation of existing television product and existing motion picture product from the Republic of Cuba for distribution with the United States. Individuals subject to United States law are permitted by the OFAC to remit to Republic of Cuba nationals profits from the distribution within the United States of music product, television product, and motion picture product. The San Diego, California-based San Diego Padres Major League Baseball Team is also reportedly discussing the holding of an exhibition baseball game in Havana. U.S. INTERESTS SECTION TO HOST RECEPTION FOR U.S. HEALTHCARE EXHIBITION PARTICIPANTS- The Honorable Vicki Huddleston, Chief of the United States Interests Section in the city of Havana, Republic of Cuba, will host a reception and briefing on 24 January 2000 at her official residence for exhibitors participating in the U.S. Healthcare Exhibition. Approximately forty-five United States-based companies have thus far reserved exhibition space at the event. Decatur, Illinois-based Archer Daniels Midland Company (1998 revenues exceeded US$14 billion) is the exclusive vitamin/food sponsor of the U.S. Healthcare Exhibition being held at the PAPEXPO exhibition center in the city of Havana, Republic of Cuba, from 25 January 2000 to 29 January 2000. Archer Daniels Midland Company (ADM) is the world’s largest producer of natural vitamin E and also produces vitamin C, lecithin (a source of choline which plays an important role in the function of the brain’s neurotransmitters), Isoflavones (a natural component of soybeans), phytosterols, and many other products. Other categories of sponsorships include: Pharmaceutical, Medical Equipment, Travel, Air Carrier, and Air Freight. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., has licensed Westport, Connecticut-based PWN Exhibicon International L.L.C., to arrange and to hold an exhibition within the Republic of Cuba to promote the sale of United States-produced healthcare products. Additional information may be obtained on the Internet at http://www.pwnexhibicon.com or by telephone (203) 222-8660 or by facsimile telephone (203) 222-8335. J.P. MORGAN & CO. ADVISES BOTH TABACALERA S.A. AND SEITA S.A. IN MERGER- New York City, New York-based J.P. Morgan & Co. Incorporated (1998 assets exceeded US$200 billion) through Madrid, Spain-based J.P. Morgan Espana S.A. and Paris, France-based J.P. Morgan & Cie S.A., is serving as the advisor to both Madrid, Spain-based Tabacalera S.A. and to Paris, France-based Seita S.A. for their announced merger, valued at US$3.3 billion. An increasing number of United States-based financial institutions are being retained as advisors in transactions within which at least one of the parties involved has substantial commercial interests with Republic of Cuba government-operated entities. Tabacalera S.A. and Seita S.A. are, respectively 1) the two largest purchasers of Republic of Cuba-produced cigars, 40% of the 126 million Republic of Cuba-produced cigars reportedly exported in 1998 2) the two largest sources of financing for Republic of Cuba-produced tobacco, approximately US$50 million (US$40 million from Tabacalera S.A. and US$10 million from Seita S.A.) for the 1998-1999 tobacco harvest and 3) the two largest purchasers of Republic of Cuba-produced tobacco leaf, almost all of the 13,000 tons exported. The newly-formed company, Altadis (Alliance Tabac Distribution), will have a market value of approximately US$7.2 billion and annual revenues of approximately US$11.8 billion, and will become the world’s largest cigar manufacturer, with 24.7% (3 billion units) of the global market. The government of Spain holds a 3.2% share in Tabacalera S.A. In 1999, Seita S.A. purchased Fort Lauderdale, Florida-based Consolidated Cigar Holdings, Inc., which produces non-Republic of Cuba-produced cigar brands Montecristo and H. Upmann, and the brands Dunhill and Dutch Masters, among others. Seita S.A. ownership of Consolidated Cigar Holdings Inc., positioned the company to become the distributor within the United States for Republic of Cuba-produced cigar brands Montecristo, H. Upmann, and Por Larranaga. Altadis will reportedly control 36% of the United States cigar market (47% of mass produced cigars and small cigars, and 20% of premium cigars). Seita S.A. has long held the exclusive distribution rights within France for Republic of Cuba-produced cigars. Tabacalera S.A. and Seita S.A. import Republic of Cuba-produced tobacco to produce mini-cigars (less than 3 grams) under the brand names Montecristo, Cohiba, Partagas, La Gloria Cubana, and H. Upmann for sale in countries on the European continent. Tabacalera S.A., signed a marketing agreement in May 1999 with Republic of Cuba government-operated Habanos S.A. (the exclusive worldwide marketer of Republic of Cuba-produced cigar products) to market mini-cigars throughout countries in Europe. Habanos S.A. is to supply the tobacco to produce Partagas brand mini-cigars, La Gloria Cubana brand mini-cigars, and H. Upmann brand mini-cigars in Spain. In April 1999, Seita S.A., Habanos S.A., and the Union of Agricultural Companies of the Republic of Cuba, established a joint venture, MiniCohiba S.A., to produce Cohiba brand mini-cigars in the Republic of Cuba for export. MiniCohiba S.A., with an initial reported capitalization of US$5 million, is expected to be operational by 2000 and produce 8 million Cohiba brand mini-cigars during the first twelve months of production, with annual production eventually reaching 25 million units. In December 1998, Cannery Islands-based CITA (a subsidiary of Tabacalera S.A.), Habanos S.A., and the Union of Agricultural Companies of the Republic of Cuba, established a joint venture, Compania de Tobacos Islanos, to produce mini-cigars in the Republic of Cuba. CITA is reportedly investing US$2 million and production is expected to begin by the end of 1999. MAYORS OF KNOXVILLE, BALTIMORE, AND CHARLESTON VISIT HAVANA- The Honorable Victor Ashe, Mayor of Knoxville, Tennessee; The Honorable Kurt Schmoke, Mayor of Baltimore, Maryland; and The Honorable Joseph Riley, Mayor of Charleston, South Carolina; along with Ms. Camille Jones Strachan, Vice Chairman of the Washington, D.C.-based National Trust for Historic Preservation, visited the city of Havana, Republic of Cuba from 4 October 1999 to 6 October 1999. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., issued a license for the visit, the purpose of which was to review historic preservation projects. NIKE TRADEMARK IN CUBA OWNED BY COMPANY IN SPAIN- Madrid, Spain-based Cidesport S.A. reportedly has the rights to the “Nike” name within the Republic of Cuba currently used worldwide by Beaverton, Oregon-based Nike, Inc. (1998 revenues exceeded US$9 billion). Cidesport S.A. is a former distributor within Spain for Nike-produced products. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., does permit United States companies to register trademarks and patents within the Republic of Cuba. BRIGGS & STRATTON CORPORATION A SPONSOR OF MILWAUKEE SYMPHONY VISIT TO CUBA- Milwaukee, Wisconsin-based Briggs & Stratton Corporation (1998 revenues exceeding US$1 billion) has contributed US$25,000.00 to be a sponsor of the Milwaukee Symphony Orchestra’s visit to the Republic of Cuba in December 1999. Briggs & Stratton Corporation manufactures and sells components for original equipment manufacturers, namely gasoline engines for outdoor powered equipment. CUBA ON TRAVELCHANNEL.COM- Oak Ridge, Tennessee-based Interactive Pictures Corporation (IPIX) and Bethesda, Maryland-based Discovery Communications, Inc. (DCI), are providing visitors to http://www.travelchannel.com to “See Cuba As If They Were There.” IPIX images provide the viewer with the ability to pan up to the sky, down to the ground, and all the way around the image. The viewer sees everything as if they were standing in the picture. According to a media release from IPIX, “At Discovery, we don't just tell our viewers about exciting travel destinations, we give them the feeling of being there with IPIX,” said Mr. John Hendricks, Chairman and Chief Executive Officer of Discovery Communications Inc. “IPIX technology is a perfect fit for TravelChannel.com because it allows the viewers to virtually step into the picture- they can see everything they would if they were really wiggling their toes in the sand of a Cuban beach…” Visitors can “take a walking tour of Old Havana…” Travel Channel is the only television network devoted exclusively to travel. DCI is a privately held media company which operates: Discovery Channel with 77.3 million subscribers, The Learning Channel (TLC) with 71.3 million subscribers, Animal Planet with 53 million subscribers, Travel Channel with 33 million subscribers, and other channels. DCI also markets and distributes BBC America. The ownership of DCI consists of four shareholders: 1) Englewood, Colorado-based Liberty Media Corporation 2) Atlanta, Georgia-based Cox Communications, Inc. 3) New York City, New York-based Advance Communications and 4) Mr. John S. Hendricks, the Founder, Chairman and Chief Executive Officer of DCI. AMERICAN GREETINGS CORPORATION INCLUDES CUBA IN PROMOTION- Cleveland, Ohio-based American Greetings Corporation (1998 revenues exceeding US$2 billion) has included mention of individuals of Cuban descent in a media release about Spanish language greeting cards. “We have a creative team of writers, editors and designers that represent all the major Spanish-speaking segments of the Hispanic market in the United States,” said Ms. Ines Barranca, Senior Editor for American Greetings. “Our members represent a wide variety of nations, including Puerto Rico, Mexico, Cuba, Guatemala, Peru, Ecuador, Spain and the United States… The Hispanic market is so diverse that writing Spanish verses to meet the needs of all its members isn’t easy… Sometimes a message that sounds wonderful to Mexicans may simply not work with Cubans or vice versa. The key is to develop verses and sentiments that speak to all the nationalities that make up the Hispanic population.” ARCHER DANIELS MIDLAND COMPANY IS A SPONSOR OF THE U.S. HEALTHCARE EXHIBITION- Decatur, Illinois-based Archer Daniels Midland Company (1998 revenues exceeded US$14 billion) is the exclusive vitamin/food sponsor of the U.S. Healthcare Exhibition being held at the PAPEXPO exhibition center in the city of Havana, Republic of Cuba, from 25 January 2000 to 29 January 2000. Archer Daniels Midland Company (ADM) is the world’s largest producer of natural vitamin E and also produces vitamin C, lecithin (a source of choline which plays an important role in the function of the brain’s neurotransmitters), Isoflavones (a natural component of soybeans), phytosterols, and many other products. Other categories of sponsorships include: Pharmaceutical, Medical Equipment, Travel, Air Carrier, and Air Freight. To date, more than thirty companies have confirmed their participation at the U.S. Healthcare Exhibition. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., has licensed Westport, Connecticut-based PWN Exhibicon International L.L.C., to arrange and to hold an exhibition within the Republic of Cuba to promote the sale of United States-produced healthcare products. The Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., is responsible for licensing the transportation of products to be exhibited at the U.S. Healthcare Exhibition. The U.S. Healthcare Exhibition is being held in the Republic of Cuba with the authorization of the Ministry of Public Health of the Republic of Cuba and MediCuba, the primary importer of healthcare products for hospitals, clinics, and other healthcare-related facilities for use by the Republic of Cuba’s 11 million citizens. The U.S. Healthcare Exhibition will be attended by officials of the Ministry of Public Health of the Republic of Cuba, representatives of MediCuba, hospital administrators, clinic administrators, hospital staff, clinic staff, physicians, nurses, and other healthcare personnel, from throughout the Republic of Cuba; and will be open to all Republic of Cuba nationals on a non-discriminatory basis on the final day of the event. There is no admission charge. United States-based healthcare product companies (and United States-based subsidiaries of non-United States-based companies) which manufacture, distribute, and/or market the following classifications of products are eligible to participate as exhibitors: Medical equipment, medical instrument, medical supply, medicine, medicated products, pharmaceutical, medical devices, hospital equipment, laboratory equipment, ambulances, physical therapy equipment, medivac equipment, training programs, training materials, and informational materials (including videos, books, etc.). Mr. Peter W. Nathan, President of PWN Exhibicon International L.L.C., has more than forty-three years of experience in the exhibition industry, and previously organized the first trade shows for United States companies that were held within the People’s Republic of China and within the former U.S.S.R. Mr. Nathan is a founding member director of the Society of Independent Show Organizers (SISO) and Vice Chairman of the New York Area Chapter of the International Association for Exposition Management (IAEM). Assisting PWN Exhibicon International LLC is Waldwick, New Jersey-based Kallman Worldwide, which is coordinating exhibitor recruitment and exhibitor liaison; and New York City, New York-based International Exhibition Transport (IET), which is providing shipping and drayage coordination. Additional information may be obtained on the Internet at http://www.pwnexhibicon.com or by telephone (203) 222-8660 or by facsimile telephone (203) 222-8335. AMERICAN AIRLINES TO BROADCAST “BUENA VISTA SOCIAL CLUB” ON FLIGHTS- Dallas/Fort Worth Airport, Texas-based American Airlines, Inc. (1998 revenues exceeding US$19 billion) will screen the motion picture “Buena Vista Social Club” on selected international flights during the month of October 1999. Ms. Veronica Lopes, Managing Director of In-Flight Products for American Airlines said “…we've chosen recent award-winning foreign films that may not be as well known as some of the domestic films currently in circulation. We think our customers will enjoy seeing something different.” The media release from American Airlines described “Buena Vista Social Club” as “both eclectic and emotionally charged, an insightful look at the unique music and music-makers of Cuba.” American Airlines has a Carrier Service Provider (CSP) license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. A CSP license authorizes a company to provide air carrier services between the United States and the Republic of Cuba. New York City-based AT&T (1997 revenues US$52 billion) was a sponsor of the 1 July 1998 live performance by the members of “Buena Vista Social Club” at Carnegie Hall in New York City. This was the first time that a Fortune 100-listed United States-based company was a public sponsor of a performance of a Republic of Cuba music group visiting the United States. AT&T, Sprint, MCI, WilTel, LDDS, and AT&T de Puerto Rico provide long distance services between the United States and the Republic of Cuba. Los Angeles, California-based KCET-TV will broadcast the “World Television Premiere of ‘Buena Vista Social Club’” on 3 November 1999 at 9:00 p.m. (EST) on PBS. According to a media release by KCET-TV, “Buena Vista Social Club,” a is a one-hour and forty-minute documentary directed by Mr. Wim Wenders (“Paris, Texas,” and “Wings of Desire”) that mixes traditional Cuban music with impressionistic glimpses of urban life in contemporary Cuba to provide a portrait of “Buena Vista Social Club,” a group of Cuban musicians, many in their 80’s and 90’s, nearly forgotten in their own country. The group, which includes some of the island’s most legendary performers, was assembled by the Grammy-winning Ry Cooder during a 1996 trip to Havana. A resulting album sold more than 1 million copies worldwide and won the 1998 Grammy for Best Tropical Latin Album. 65% TO 67% INCREASE
IN OFAC LICENSES FOR TRAVEL, CARRIER, AND REMITTANCE SERVICES- The
Office of Foreign Assets Control (OFAC) of the United States Department
of the Treasury in Washington, D.C., has, as of 12 August 1999, issued
214 travel-related and service-related licenses to 115 United States-based
companies. Approximately twelve months ago, the OFAC had issued
144 travel-related and service-related licenses to 75 United States-based
companies. Some of the companies include: Dallas Fort Worth Airport,
Texas-based American Airlines, Inc. (CSP), New York City, New York-based
American Express Travel Related Services (TSP), Paramus, New Jersey-based
Western Union Financial Services International (RF), Englewood, Colorado-based
MoneyGram Payment Systems (RF), and Fort Lauderdale, Florida-based Tico
Travel (TSP). The licenses, which are renewed every twelve months,
authorize United States-based companies to provide services for individuals
subject to United States law with respect to traveling to the Republic
of Cuba and for sending funds to the Republic of Cuba. The license
categories are: 1) Travel Services Provider (TSP) 2)
Carrier Service Provider (CSP) and 3) Remittance Forwarder
(RF). Executives of United States-based companies report that becoming
an authorized OFAC travel-related and service-related licensee for the
Republic of Cuba assists with developing a) operational
experience within the Republic of Cuba and b) relationships
with individuals within the Republic of Cuba. Some United States-based
companies have OFAC licenses to provide more than one type of service.
The following chart represents information provided by the OFAC.
Figures for 1998 are in parentheses.
St. Croix, St. John, and Water Island) were 2.1 million in 1998 with 1.6 million of the 2.1 million arriving by cruise ship. Visitor spending was US$921.4 million in 1998 according to the Government Development Bank. Mr. Johnson, in an interview with Reuters, said, “When Cuba opens up, it's going to create real havoc for the islands.” KCET-TV IN LOS ANGELES WILL BE FIRST TO BROADCAST BUENA VISTA SOCIAL CLUB FILM- Los Angeles, California-based KCET-TV will broadcast the “World Television Premiere of ‘Buena Vista Social Club’” on 3 November 1999 at 9:00 p.m. (EST) on PBS. According to a media release by KCET-TV, “Buena Vista Social Club,” a documentary directed by Mr. Wim Wenders that mixes traditional Cuban music with impressionistic glimpses of urban life in contemporary Cuba. The one-hour and 40-minute film will be followed by excerpts of a Charlie Rose interview with Wenders and one of the film's producers, guitarist Ry Cooder. Filmmaker Wenders (“Paris, Texas,” “Wings of Desire”) provides a feature-length portrait of the Buena Vista Social Club, a group of talented Cuban musicians, many in their 80’s and 90’s, nearly forgotten in their own country. The group, which includes some of the island’s most legendary performers, was assembled by the Grammy-winning Cooder during a 1996 trip to Havana. Cooder’s quest was to record an album featuring the country's traditional music, including Cuban boleros and sones, dating as far back as the 1920’s. He named the album “Buena Vista Social Club” after a private club that was a musical mecca in pre-Castro Cuba. It sold more than 1 million copies worldwide and won the 1998 Grammy for Best Tropical Latin Album. Cooder then convinced his longtime friend Wenders to return with him to Cuba to film the musicians in their homeland and in performance at various locations. The documentary reveals the joy and spontaneous creativity of these amazing musicians, including footage from studio performances, the group’s concert in Amsterdam and their historic 1998 Carnegie Hall performance. Wenders’ camera also follows the artists into the hot, dusty streets of their youth, where their recollections lead to touching and often humorous stories. In the film’s finale, viewers witness the musicians' awestruck response to being in New York City for the first time. Among the musicians Cooder rediscovered was the film’s star, 70-year-old Ibrahim Ferrer, whom Cooder nicknamed “the Nat King Cole of Cuba” for his velvety voice. Ferrer was literally born at a social club dance, won his first singing contest at age 12 and began singing professionally in 1941. In the 1950’s, he performed with legendary names in Cuban music, including the Orquesta de Chapin and Benny More. Another featured musician is 90-year-old Compay Segundo, the lead guitarist who invented the armonico, a cross between a guitar and a Cuban tres, and who reveals his zest for life when the father of five declares that he hopes to sire a sixth child. Also highlighted is Ruben Gonzalez, 77, whom Cooder describes as “the greatest piano soloist I have ever heard in my life” and who is the only survivor of a trio of pianists from the period that helped shape the future sound of Cuban music. The only woman in the group is Omara Portuondo, 68, known as “the Edith Piaf of Cuba,” a veteran of world tours who worked with Nat King Cole. These musicians join 11 others ranging in age from the 14-year-old percussionist sensation Julienne Oviedo Sanchez to 81-year-old singer/songwriter Pio Leyva. Songs featured in the film include “Chan Chan” (Francisco Repilado), “Silencio” (Rafael Hernandez), “Dos Gardenias” (Isolina Carillo), “Buena Vista Social Club” (Orestes Lopez), “Candela” (Faustino Oramas), “Viente Anos” (Maria Teresa Vera) and “El Cuarto de Tula” (Sergio Siaba). New York City-based AT&T (1997 revenues US$52 billion) was a sponsor of the 1 July 1998 performance of the “Buena Vista Social Club” at Carnegie Hall in New York City. This was the first time that a Fortune 100-listed United States-based company was a public sponsor of a performance of a Republic of Cuba music group visiting the United States. AT&T, Sprint, MCI, WilTel, LDDS, and AT&T de Puerto Rico provide long distance services between the United States and the Republic of Cuba. LONE STAR INDUSTRIES
RECEIVES OFAC LICENSE TO VISIT ASSET CLAIM IN CUBA- Mr. David W. Wallace,
Chairman of Stamford, Connecticut-based Lone Star Industries, Inc. (1998
revenues US$347.1 million), is scheduled to visit the Republic of Cuba
in October 1999. Mr. Wallace received a license from the Office
of Foreign Assets Control (OFAC) of the United States Department of the
Treasury in Washington, D.C., to visit the Republic of Cuba for the purpose
of visiting a cement plant in Mariel, 20 kilometers west of the city of
Havana. Lone Star Industries has a claim registered with the United
States Foreign Claims Settlement Commission in Washington, D.C., in the
amount of US$24.90 million. This is the first OFAC license issued
to a United States-based company having a claim registered with the Foreign
Claims Settlement Commission in Washington, D.C., for the specific purpose
of authorizing representatives of the claimant to visit the Republic of
Cuba to visually inspect the claim. Such licenses are expected to
continue to be issued. Mr. Wallace is expected to meet with representatives
of the Ministry of Foreign Affairs of the Republic of Cuba and the Ministry
of Basic Industry of the Republic of Cuba. On 27 January 1997, the
U.S.-Cuba Trade and Economic Council wrote to the OFAC seeking the criteria
for which the OFAC would grant a license to a United States-based company
having a claim registered with the Foreign Claims Settlement Commission
in Washington, D.C., for the specific purpose of authorizing representatives
of the claimant to visit the Republic of Cuba to visually inspect the
claim. On 28 February 1997, the OFAC responded (CU-155302) “Travel
for the purpose you have described does not fall into any categories in
515.560 [Cuban Assets Control Regulations, 31 C.F.R. Part 515] for
which a specific license may be issued. After consultation with
the Department of State, it has been determined that it would be inconsistent
with current policy to authorize travel transactions by U.S. persons for
the purpose described in your letter.” There are 5,911 claims
certified by the United States Foreign Claims Settlement Commission in
Washington, D.C., as of June 1972. Of these claims, 30 United States
companies hold 56.85% of the total value, which is approximately US$1,851,197,358.00.
The United States Foreign Claims Settlement Commission permitted interest
to be accrued in the amount of 6% per annum. Lone Star Industries
Inc. is being acquired by Wiesbaden, Germany-based Dykerhoff AG (1998
revenues of approximately US$2 billion) for US$1.19 billion, plus the
assumption of US$50 million in debt. Upon completion of the acquisition,
scheduled for October 1999, Dykerhoff AG will have control of the claim
of Lone Star Industries Inc., and may be permitted by the government of
the Republic of Cuba to negotiate a settlement. Monterrey, Mexico-based
Cemex SA de CV. (1998 revenues US$4.3 billion), the third-largest cement
producer in the world, provided technical assistance from 1994 through
1996 to a Republic of Cuba government-operated cement plant also located
in Mariel. Cemex SA de CV. had signed a ten-year agreement with
the government of Mexico-owned Mexico Bank for Foreign Trade (Bancomext)
and Republic of Cuba government-operated UEC (Cement Producers Association
of the Republic of Cuba) to provide technical assistance at their jointly-owned
cement plant located in Mariel, constructed by the government of the Republic
of Cuba in the 1970’s. In 1994, Bancomext had received a 50% interest
in the cement plant in a swap for debt owed to Mexico by the government
of the Republic of Cuba. The ten-year agreement had provided Cemex
SA de CV. exclusive rights to export the cement and clinker produced by
the five other Republic of Cuba government-operated cement plants located
in the Republic of Cuba. In 1996, Cemex SA de CV. “officially” ceased
activities within the Republic of Cuba. Republic of Cuba cement
production:
REEBOK PROVIDES CLOTHING TO NEBRASKA SOCCER TEAM VISITING CUBA- Stoughton, Massachusetts-based Reebok International Ltd. (1998 revenues exceeded US$3 billion) provided soccer jerseys to the 21-member Gold Nemesis soccer team from Lincoln, Nebraska, for their August visit to the Republic of Cuba. This is the first occurrence of a United States-based global consumer products company specifically providing products with an identifying logo for distribution within the Republic of Cuba in conjunction with an event licensed by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington. D.C. The Gold Nemesis soccer team is the under-17 years-of-age four-time Nebraska state champion. The Reebok soccer jerseys were presented to the members of the high school-level soccer teams from the Republic of Cuba. The Gold Nemesis soccer team had written a letter to Reebok International Ltd. to request soccer jerseys specifically for the visit to the Republic of Cuba. The first occurrence of a United States-based global consumer-based company being a sponsor of a public event within the United States relating to the Republic of Cuba was on 1 July 1998 when New York City-based AT&T (1998 revenues exceeded US$53 billion) was a sponsor of the sell-out performance of the “Buena Vista Social Club” at Carnegie Hall in New York City. The “Buena Vista Social Club” which consists of legendary Republic of Cuba nationals Ibrahim Ferrer, Ruben Gonzalez, Eliades Ochoa, and Compay Segundo, along with Ry Cooder, won a Grammy Award in 1998 for “Best Tropical Latin Performance.” AT&T, Sprint, MCI, Wil-Tel, LDDS, and AT&T de Puerto Rico provide long distance services between the United States and the Republic of Cuba. UNITED STATES NATIONAL SOCCER TEAM GAME IN CUBA TO BE BROADCAST BY ESPN- On 19 July 2000, the United States National Soccer Team is expected to play an exhibition match in the Republic of Cuba. The United States National Soccer Team last played in the Republic of Cuba on 20 July 1947. The Republic of Cuba National Soccer Team last played in the United States on 1 February 1998 in Oakland, California. The exhibition soccer game is expected to be broadcast by Bristol, Connecticut-based ESPN, Inc., which is 80% owned Burbank, California-based The Walt Disney Company (1998 revenues US$22 billion) and 20% owned by New York City, New York-based The Hearst Corporation (1998 revenues US$2 billion). On 28 March 1999, ESPN broadcast the Baltimore, Maryland-based Baltimore Orioles Major League Baseball Team exhibition baseball game against the Republic of Cuba government-operated National Team, which the Baltimore Orioles won by a score of 3 to 2, at the 50,000-seat Estadio Latinamericanos Stadium in the city of Havana. ESPN broadcast the exhibition baseball game and paid the government of the Republic of Cuba what the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., described as “normal and reasonable” fees. United States-based companies advertising on ESPN during the baseball exhibition game included: General Motors Corporation, Suzuki, Sprite, MCI WorldCom, MetLife, Roundup, Range Rover, Head and Shoulders shampoo, 10-10-321 long distance telephone service, Little Caesars, and Advil among others. Miami, Florida-based WPLG-TV, an affiliate of New York City, New York-based ABC, Inc. (which is owned by The Walt Disney Company), simulcast the baseball game with ESPN. WPLG-TV reported that it did not pay any fees to the government of the Republic of Cuba for rights to broadcast the baseball game. The Anaheim, California-based Anaheim Angeles Major League Baseball Team, which is owned by The Walt Disney Company, is seeking a license from the OFAC to play an exhibition baseball game in the city of Havana. The Walt Disney Company has many subsidiaries, including: 1) Hollywood Records (the OFAC permits the exportation of music product from the United States to the Republic of Cuba for distribution within the Republic of Cuba and the OFAC permits the importation of existing music product from the Republic of Cuba for distribution within the United States). 2) Disney Channel (the OFAC permits the exportation of television product and motion picture product from the United States to the Republic of Cuba for distribution within the Republic of Cuba and the OFAC permits the importation of existing television product and existing motion picture product from the Republic of Cuba for distribution with the United States. Individuals subject to United States law are permitted by the OFAC to remit to Republic of Cuba nationals profits from the distribution within the United States of music product, television product, and motion picture product. The San Diego, California-based San Diego Padres Major League Baseball Team is also reportedly discussing the holding of an exhibition baseball game in Havana INDEX OF LIVING
COSTS FOR U.S. GOVERNMENT EMPLOYEES RESIDING IN CUBA- The Office of
Allowances (202-663-1121; http://www.state.gov)
within the Office of Operations of the Bureau of Administration of the
Under Secretary of Management of the United States Department of State
in Washington, D.C., provides an Index of Living Costs Abroad and Hardship
Differentials for employees of the United States government residing in
the Republic of Cuba. The Republic of Cuba is considered a “Hardship
Post” thus entitling employees of the United States government to receive
a 20% “Hardship Differential” increase in salary. Some other postings
which also have a 20% “Hardship Differential” include: Ho Chi Minh City,
Vietnam; Islamabad, Pakistan; Jeddah, Saudi Arabia; Kiev, Ukraine; Kathmandu,
Nepal; Calcutta, India; and Georgetown, Guyana.
OFAC INCREASES
PER DIEM IN CUBA 6.16%, FROM US$183.00 TO US$195.00- The Office of
Foreign Assets Control (OFAC) of the United States Department of the Treasury
in Washington, D.C, has increased the Per Diem allowance for employees
of the United States government visiting the Republic of Cuba to US$195.00
(US$113.00 for lodging and US$82.00 for meals) from US$183.00 (US$102.00
for lodging and US$81.00 for meals), representing an increase of US$12.00
per day, or 6.16% from the Per Diem rate in effect from 1 December 1996.
An increase in the Per Diem reflects an evaluation by the United States
Department of State that prices within the Republic of Cuba have increased.
Per Diem rates within the Republic of Cuba are based upon the Per Diem
Rate For Foreign Areas issued by the Office of Allowances (202-663-1121)
within the Office of Operations of the Bureau of Administration of the
Under Secretary of Management of the United States Department of State
in Washington, D.C. Per Diem values for travel to the city of Havana
from 1995 through August 1999:
Individuals (non-employees of the United States government) subject to United States law traveling to the Republic of Cuba under a general license from the OFAC or a specific license from the OFAC were permitted to spend US$100.00 per day (no distinction with respect to lodging and meals) from 1985 through May 1999. Since May 1999, individuals subject to United States law traveling to the Republic of Cuba under a general license from the OFAC or a specific license from the OFAC have been permitted to spend at parity with representatives of the United States government traveling to the Republic of Cuba on official business. NEW YORK CITY
AND LOS ANGELES TO HAVE DIRECT FLIGHTS TO CUBA- The Office of Foreign
Assets Control (OFAC) will license United States-based companies to provide
direct air charter flights between John F. Kennedy International Airport
in New York City, New York, and the Republic of Cuba and between Los Angeles
International Airport in Los Angeles, California, and the Republic of
Cuba. The flights from each city are expected to commence by October
1999. United States-based companies seeking to operate the air charter
flights must obtain a Carrier Service Provider (CSP) license from the
OFAC. Currently, Miami International Airport in Miami, Florida,
is the only gateway for air charter flights between the United States
and the Republic of Cuba. In 1998, Miami International Airport received
an estimated US$30 million in direct and indirect revenues (ticket fees,
passenger services, etc.) from air charter flights between the United
States and the Republic of Cuba. In 1999, an estimated 140,000 individuals
subject to United States law will visit the Republic of Cuba under a specific
license from the OFAC or under a general license from the OFAC.
Representatives of United States companies who are individuals subject
to United States law are permitted to travel on the direct air charter
flights to visit the Republic of Cuba. Authorized business travelers
include those in the following categories: agricultural products, air
charter services, artwork, communications, cultural events, educational
presentations, entertainment, exhibitions, farm supplies, food sales,
informational materials, medical equipment, medical instruments, medical
supplies, medicated products, medicines, money transfer services, package
delivery services, pharmaceuticals, telecommunications; and travel services.
SMITHLKINE BEACHAM RECEIVES OFAC LICENSE FOR CUBAN MENINGITIS B VACCINE- Brentford, United Kingdom-based SmithKline Beacham plc (1998 revenues exceeding US$10 billion) and its United States-based subsidiary, Philadelphia, Pennsylvania-based SmithKline Beacham, have received a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. The OFAC license, which was approved after eighteen months of inter-agency review by the Clinton Administration, authorizes SmithKline Beacham to enter into an agreement with Republic of Cuba government-operated Carlos Finlay Institute for testing, clinical trials, and marketing of a Meningitis B vaccine developed by the Carlos Finlay Institute in 1985. Since SmithKline Beacham owns the Brussels, Belgium-based facility where the testing and clinical trials will be held, an OFAC license was required. SmithKline Beacham currently markets vaccines to prevent Meningitis A and to prevent Meningitis C. The Finlay Institute could eventually receive US$10 million to US$20 million from SmithKline Beecham plc for a five-year exclusive right to market the vaccine. Under the terms of the OFAC license, during the testing and clinical trial stages, SmithKline Beacham will compensate Carlos Finlay Institute in the form of products (perhaps healthcare products and food products) equal to the U.S. Dollar value of the compensation. If the Meningitis B vaccine is marketed, SmithKline Beacham will then make royalty payments to Carlos Finlay Institute in U.S. Dollars or their equivalent. Approximately 1,000 United States citizens contract Meningitis B each year, of which 120 die. The Honorable Arlen Specter (R-Pennsylvania) visited the Republic of Cuba from 2 June 1999 to 3 June 1999, where he met with representatives of the Ministry of Public Health of the Republic of Cuba and visited the Carlos Finlay Institute. Senator Specter said that “Cuba can benefit from the research of the National Institutes of Health [NIH] and we can benefit from the research [the Cubans] are doing in meningitis B, for example.” He said that a meeting would be requested with The Honorable Donna Shalala, United States Secretary of Health and Human Services, to discuss opportunities for bilateral cooperation in public health matters. Senator Specter is the Chairman of the Subcommittee on Labor, Health and Human Services, Education, and Related Agencies of the Committee on Appropriations of the United States Senate. Also supporting the OFAC license application request by SmithKline Beacham were from the United States Senate: The Honorable Christopher Dodd (D-Connecticut) and The Honorable Richard Lugar (R-Indiana), among others; and from the United States House of Representatives: The Honorable Tom DeLay (R-Texas), The Honorable Sonny Callahan (R-Alabama), The Honorable Joseph McDade (R-Pennsylvania), The Honorable James Greenwood (R-Pennsylvania), The Honorable Nancy Pelosi (D-California), The Honorable Henry Waxman (D-California), and The Honorable Howard Berman (D-California) among others. MINISTRY OF FOREIGN TRADE REPRESENTATIVES VISIT UNITED STATES- Mrs. Maria de la Luz B’Hamel, Director of North American Trade Policy of the Ministry of Foreign Trade of the Republic of Cuba (MINCEX), and Mr. Igor Montero Brito, Chief Commodity Buyer for Republic of Cuba government-operated Alimport (which is managed by MINCEX), are visiting the United States from 3 July 1999 to 22 July 1999. Alimport is responsible for importing approximately US$800 million in bulk food commodities on an annual basis for the 11 million citizens of the Republic of Cuba. Mrs. de la Luz and Mr. Brito are visiting the United States at the invitation of the Washington, D.C.-based U.S. Grains Council. The visit is being underwritten, in part, by New York City, New York-based Continental Grain Company (1998 revenues exceeded US$15 billion) and includes: 1) a visit to grain facilities and livestock facilities in Iowa hosted by the Iowa Corn Promotion Board 2) a tour of Continental Grain Company operations and 3) attending a meeting with members of the Board of Directors of the U.S. Grains Council. The Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., may approve applications for exports of food (both solids and liquids) and agricultural commodities for use by independent non-governmental entities within the Republic of Cuba. The entities may not be controlled, owned, or operated by the government of the Republic of Cuba. When submitting applications, applicants must demonstrate on the BXA license application that the prospective end-user or class of end-users is independent from the government of the Republic of Cuba. Independent non-government entities include, but are not limited to, religious groups, private farmers, and private sector undertakings such as family restaurants (known as “paladares”). Export financing is not authorized. Unclear remains whether the BXA will permit an entity controlled by the government of the Republic of Cuba, such as Alimport, to be the “purchaser” but not the “end user.” The United States Department of State has previously stated that United States-based companies may not export products to Alimport. Form BXA-748P, the BXA Multipurpose Application Form for exports to the Republic of Cuba and other countries, provides that an “Ultimate Consignee” may be “government purchasing organizations.” In addition, Form BXA-748P provides for designations of “Intermediate Consignee,” “Original Ultimate Consignee,” and “End-User.” Agricultural industry estimates are that if an entity controlled by the government of the Republic of Cuba can be the “purchaser,” United States exports to the Republic of Cuba during the next twelve to eighteen months could exceed US$300 million, but such a level of exports may not be realized if export financing is not authorized. If an entity controlled by the government of the Republic of Cuba is not authorized to be the “purchaser,” and export financing is not authorized, United States exports to the Republic of Cuba during the next twelve to eighteen months could be less than US$100,000.00. WESTERN UNION BEGINS ELECTRONIC FUNDS TRANSFER SERVICE- On 8 July 1999, Republic of Cuba government-operated Fincimex S.A., a subsidiary of Republic of Cuba government-operated Cimex S.A. established an initial thirty locations throughout the Republic of Cuba (19 of which are located in the city of Havana, which has a population of approximately 2 million of the Republic of Cuba’s total population of approximately 11 million) within which Republic of Cuba nationals can obtain funds sent electronically through Paramus, New Jersey-based Western Union Financial Services International, a division of Atlanta, Georgia-based First Data Corporation (1998 revenues exceeding US$5 billion). Initially, Western Union Financial Services International will only offer the electronic funds transfer services in the State of Florida, and will soon expand to all other states and to Puerto Rico. Electronic transfers are available at Republic of Cuba government-operated Pan Americanas U.S. Dollar retail stores and at Republic of Cuba government-operated Servi-Cupet fuel service stations. Western Union Financial Services International is charging a service fee to approximately US$29.00, or 14%, to the sender, to send US$200.00 to US$300.00 to the Republic of Cuba. Western Union Financial Services will share a percentage of the service fee with Fincimex S.A. Since 1994, Western Union Financial Services International has held a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury to serve as a Family Remittance Forwarder (FRF), but had only been authorized to use their electronic funds transfer system for fund transfers associated with emergencies or emigration costs. The OFAC authorizes any individual subject to United States law to send up to up to US$300.00 every four months (US$1,200.00 annually) to any Republic of Cuba national, provided that the Republic of Cuba national is not a senior-level official of the Communist Party of the Republic of Cuba or a senior-level official of the government of the Republic of Cuba. The OFAC permits remittances to be transferred from the United States to the Republic of Cuba through FRF’s licensed by the OFAC, or by United States-based depository institutions licensed by the OFAC, or through individuals traveling to the Republic of Cuba under a license (general or specific) issued by the OFAC, or through third countries. MONEYGRAM EXPECTS TO BEGIN ELECTRONC FUNDS TRANSFER SERVICE SOON- Lakewood, Colorado-based MoneyGram Payment Systems, Inc., which is a subsidiary of Phoenix, Arizona-based Viad Corp (1998 revenues exceeded US$2 billion) is awaiting a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to commence electronic fund transfer services between the United States and the Republic of Cuba. Viad Corp has subsidiaries in convention services, travel and leisure, and payment services. Moneygram Payment Systems, Inc., recently merged with Minneapolis, Minnesota-based Travelers Express Company, Inc., a subsidiary of Viad Corp, that services more than 5,000 financial institutions and 65,000 retail locations, and annually processes more than 1 billion payment transactions valued at more than US$120 billion. The company offers electronic funds transfer services at more than 26,000 locations in 120 countries. MORGAN STANLEY DEAN WITTER & CO. MAY BENEFIT IF MARZOTTO ENTERS CUBA MARKET- Valdagno, Italy-based Marzotto & Figli SpA (1998 global revenues of approximately US$1.2 billion), is evaluating marketing, distribution, and production opportunities within the Republic of Cuba. Marzotto & Figli SpA is recognized as the largest textile manufacturer and clothing manufacturer located on the European continent. On 25 September 1998, New York City, New York-based Morgan Stanley Dean Witter & Co. (1998 assets exceeding US$350 billion) increased its equity interest in Marzotto & Figli SpA to 4.401% from 3.162%. Morgan Stanley Dean Witter & Co. provides investment banking, consumer financial services, brokerage services, asset management, and consumer credit and banking services. The Honorable Laura D’Andrea Tyson, a former Chairman of the Council of Economic Advisors to The Honorable William J. Clinton, President of the United States, is a member of the Board of Directors of Morgan Stanley Dean Witter & Co. Marzotto & Figli SpA owns the Hugo Boss brand name, which is licensed to Cincinnati, Ohio-based The Procter & Gamble Company (1998 revenues exceeded US$37 billion) to market Hugo Boss men’s fragrances and Hugo Boss women’s fragrances. Marzotto & Figli SpA produces the Marlboro Classics brand of clothing, the name of which is licensed from New York City, New York-based Philip Morris Companies Inc. (1998 revenues exceeded US$74 billion). New York City, New York-based Marzotto USA Corporation is the United States-based representative of Marzotto & Figli SpA. MORGAN STANLEY DEAN WITTER & CO., GOLDMAN, SACHS & CO. RETAINED BY ELF AQUITAINE- New York City, New York-based Morgan Stanley Dean Witter & Co. (1998 assets exceeding US$350 billion) and New York City, New York-based Goldman, Sachs & Co., have been retained by Courbevoie, France-based Elf Aquitaine SA as advisors in an effort to thwart a takeover (valued at approximately US$43 billion) of Elf Aquitaine SA by Paris, France-based TotalFina S.A. If successful, the combination of the two companies would create the world’s fourth-largest oil company, with a market value of approximately US$85 billion. Elf Aquitaine SA markets lubricants, chemicals, and other products within the Republic of Cuba. Elf Aquitaine SA has a Republic of Cuba-based joint venture located in the city of Santiago de Cuba, 850 kilometers east of the city of Havana, which produces (mixed) lubricants for the Republic of Cuba’s sugar industry. Elf Aquitaine SA and Republic of Cuba government-operated Cuba Petroleo S.A. (Cupet) have an agreement to supply 100,000 homes located in eastern Republic of Cuba with gas stoves and cooking gas by the year 2002. The gas, which will eventually amount to 40,000 tons annually, will initially be imported and then bottled in eastern Republic of Cuba, and replaces kerosene currently used in 80% of homes within the Republic of Cuba. A representative of Elf Aquitaine SA previously reported that the decision to conduct commercial operations within the Republic of Cuba was consistent with the company’s expansion strategy into Caribbean Sea-area countries and to countries throughout the Americas. New York City, New York-based Elf Aquitaine, Inc., is the United States-based holding company for investments of Elf Aquitaine SA. From 1994 to 1996, Total S.A. (the name of the company before the merger with Brussels, Belgium-based PetroFina S.A. formed TotalFina S.A.) explored for oil within the Republic of Cuba. Total S.A. reportedly discovered one non-commercially-viable oil deposit that was difficult to access and consisted of extremely heavy crude oil that was high in sulfur content. Reportedly, TotalFina S.A. continues to have some Republic of Cuba-related commercial activity. UNITED STATES CHAMBER OF COMMERCE PRESIDENT TO VISIT CUBA- Mr. Thomas Donahue, President of the Washington, D.C.-based Chamber of Commerce of the United States, will visit the Republic of Cuba during the week of 12 July 1999 under the auspice of a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. According to a spokesperson at The White House in Washington, D.C., the purpose of the visit is to promote “private enterprise.” In April 1999, Mr. Donahue was quoted as saying that the objectives of the visit would include a discussion of “what might be done in expanding trade in goods, medicine, and tourism.” CUBA.COM ARRIVES ON THE INTERNET- In what is expected to become the single-most accessed Republic of Cuba-focused site on the Internet, http://www.cuba.com has been registered with Herndon, Virginia-based Network Solutions and plans to become the non-partisan global link for any company in any country with an interest toward the Republic of Cuba- whether that interest be current or be focused toward the future. Individuals will access http://www.cuba.com to locate company names and then immediately be able to link to that company’s Internet site. Reportedly, ten (10) homepage banner advertisements are being made available to companies on the http://www.cuba.com home page at an introductory price of US$10,500.00 for one-year. For information, contact Mr. C.C. Hoagland at telephone: (843) 681-2119; facsimile (843) 681-2223; and e-mail: hhi@hargray.com FIAT ELECTS GENERAL ELECTRIC CHAIRMAN TO BOARD OF DIRECTORS- Mr. Jack F. Welch, Jr., Chairman and Chief Executive Officer of Fairfield, Connecticut-based General Electric Company (1998 revenue exceeded US$100 billion), has been elected to the Board of Directors of Turin, Italy-based Fiat S.p.A. The Chairman of Fiat S.p.A. is Mr. Paolo Fresco, a former long serving Vice Chairman of General Electric Company. The government of the Republic of Cuba, through various Republic of Cuba government-operated entities, has purchased hundreds of Fiat S.p.A.-manufactured vehicles during the last four years, specifically vans, trucks, and rice harvesters. Republic of Cuba government-operated Cubalse S.A. reported that the company will purchase up to 1,000 vehicles manufactured by Fiat S.p.A. throughout 1999 for use by Micar, a vehicle-renting subsidiary of Cubalse. Mr. Lazaro Rodriguez, General Manager of Micar, reported that 500 Fiat vehicles were already in use, and that by limiting the rental fleet to Fiat vehicles, Micar had secured substantial discounts on the vehicles and on parts. Customers of Micar can obtain free vehicle service throughout the Republic of Cuba at Oro-Negro service stations. Oro-Negro is a subsidiary of Cubalse S.A. FLORIDA COMPANIES SEEKING LICENSES FOR FERRY SERVICES TO CUBA- Companies based in Fort Lauderdale, Florida, and in Key West, Florida, have applied to the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., for licenses to operate ferry service between the United States and the Republic of Cuba. The applied for routings would be Fort Lauderdale-Havana and Key West-Havana. Travel on the ferry service would be limited to individuals subject to United States law traveling to the Republic of Cuba under the auspice of a general OFAC license or a specific OFAC license. Individuals subject to United States law traveling to the Republic of Cuba on a “fully hosted” basis would not be permitted to travel on the ferry service. The companies applying for the OFAC licenses confirm their intention to 1) decrease the roundtrip cost of a ticket from what is currently charged by regularly-scheduled aircraft charter companies with Carrier Service Provider OFAC licenses 2) increase substantially the quantity of baggage permitted for each traveler 3) lower excess baggage fees and 4) cargo would be transported at costs substantially less than the current average of US$2.00 per pound charged by companies with CSP licenses from the OFAC that use aircraft. PRICEWATERHOUSECOOPERS REPORTS ON CUBA AS AN INVESTMENT- The Calgary, Canada, office of the London, United Kingdom-based PricewaterhouseCoopers, the international professional services organization, published the following information: In November 1997 the Alberta Court of Queen's Bench appointed PricewaterhouseCoopers Inc., as Interim Receiver-Manager of Calgary, Canada-based Bresea Resources Ltd. PricewaterhouseCoopers is aware of a 8 June 1999 takeover bid circular from Toronto, Canada-based MacDonald Oil Exploration Ltd., wherein MacDonald Oil Exploration Ltd. offers to purchase the common shares of Bresea Resources Ltd. The common shares of Bresea have been cease traded by the Quebec Securities Commission and the British Columbia Securities Commission since May 1997 and have been delisted from the Montreal Stock Exchange (MSE). Generally, the board of directors of a company that is the target of a takeover bid will evaluate the bid and make a recommendation to the shareholders to accept or reject the offer. Bresea Resources Ltd. does not have a board of directors. PricewaterhouseCoopers, in its capacity as Receiver-Manager of Bresea Resources Ltd., is currently reviewing the propriety of the offer by MacDonald Oil Exploration Ltd. to purchase the Bresea Resources Ltd. common shares and will be preparing submissions to the securities commissions. The offer by MacDonald Oil Exploration Ltd. requests that Bresea Resources Ltd. shareholders consider receiving 1 MacDonald Oil Exploration Ltd. convertible preferred share and 1 MacDonald Oil Exploration Ltd. E-Warrant for each Bresea Resources Ltd. share. Each convertible preferred share is convertible into 3 MacDonald Oil Exploration common shares until 1 June 2003 or redeemable by MacDonald Oil Exploration Ltd. for US$.28 per share in certain circumstances and each MacDonald Oil Exploration Ltd. E-Warrant entitles the holder to purchase 1 MacDonald Oil Exploration Ltd. common share for US$0.07 per share until 1 March 2000 or thereafter for US$0.14 per share until 1 March 2001. PricewaterhouseCoopers notes that, based on the information in the offer by MacDonald Oil Exploration Ltd., the net asset value (on a fully diluted basis) of MacDonald Oil Exploration Ltd. is US$0.28 per share. During the past twelve months (June 1998 to May 1999), the common shares of MacDonald Oil Exploration Ltd. have traded from a high of US$0.07 to a low of US$0.02. PricewaterhouseCoopers also notes that, based on the information contained in the offering circular of MacDonald Oil Exploration Ltd., MacDonald Oil Exploration Ltd. is an exploration company focussed exclusively on oil and gas development opportunities in the Republic of Cuba. PricewaterhouseCoopers views this exploration as highly speculative and subject to political risks. Furthermore, it could present legal issues for current Bresea shareholders subject to United States law. PricewaterhouseCoopers, in its capacity as interim Receiver of Bresea Resources Ltd., does not believe that the offer by MacDonald Oil Exploration Ltd. is in the best interest of the Bresea Resources Ltd. shareholders and recommends that the offer be rejected. WESTERN UNION TO COMMENCE WIRE TRANSFER SERVICES TO CUBA- In July 1999, Paramus, New Jersey-based Western Union Financial Services International, a division of Atlanta, Georgia-based First Data Corporation (1998 revenues exceeding US$5 billion) is expected to commence wire transfer services between the United States and the Republic of Cuba. Initially, Western Union Financial Services International will only offer the wire transfer service in the State of Florida, and will soon expand to all other states and to Puerto Rico. Republic of Cuba government-operated Cimex S.A. will serve as the agent for Western Union Financial Services within the Republic of Cuba. Initially, funds will be available at 30 locations (in twelve cities) within the Republic of Cuba, including Republic of Cuba government-operated Pan Americana U.S. Dollar retail stores and Republic of Cuba government-operated Servi-Cupet service stations. Western Union Financial Services International reportedly will charge a service fee to approximately US$29.00, 0r 14%, to the sender to send US$200.00 to the Republic of Cuba. Western Union Financial Services will then share a percentage of the service fee with Cimex S.A. Since 1994, Western Union Financial Services International has held a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury to serve as a Family Remittance Forwarder (FRF), but had only been authorized to use their electronic transfer system for cash transfers associated with emergencies or emigration costs. In July 1993, an individual subject to United States law, Mr. Luis S. Mendez, on behalf of Western Union Financial Services International, obtained an invitation from Cimex S.A., for executives of Western Union Financial Services International to visit the Republic of Cuba on a fully-hosted basis. The visit resulted in a Letter of Intent being signed between Cimex and Western Union Financial Services International. On 26 July 1993, the government of the Republic of Cuba authorized Republic of Cuba nationals to use U.S. Dollars for transactions within the Republic of Cuba. From 1993 until 1996, remittances sent from the United States to the Republic of Cuba under licenses (general and specific) from the OFAC were estimated to be approximately US$285 million annually. In March 1996, the OFAC eliminated the sending of remittances from the United States to the Republic of Cuba under a general license and began requiring specific licenses; and remittances would only be permitted for purposes of emigration or in extreme humanitarian need. In March 1998, the OFAC re-authorized under a general license individuals subject to United States law who have relatives residing within the Republic of Cuba to send up to US$300.00 every four months (US$1,200.00 annually). In January 1999, the OFAC authorized any individual subject to United States law to send up to up to US$300.00 every four months (US$1,200.00 annually) to any Republic of Cuba national, provided that the Republic of Cuba national is not a senior-level official of the Communist Party of the Republic of Cuba or a senior-level official of the government of the Republic of Cuba. The OFAC permits remittances to be transferred from the United States to the Republic of Cuba through Family Remittance Forwarders (FRF) licensed by the OFAC, or by United States-based depository institutions licensed by the OFAC, or through individuals traveling to the Republic of Cuba under a license (general or specific) issued by the OFAC, or through third countries. QUEST NET RECEIVES OFAC LICENSE FOR CUBA VISIT TO DISCUSS FIBER OPTIC CABLE- Aventura, Florida-based Quest Net Corporation (OTC BB: QNET; first quarter revenues for 1998, ending 30 September 1998, were US$957,000.00) reported that Mr. Camilo Pereira, President of the company, has received a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., authorizing a visit to the Republic of Cuba. In March 1999, Quest Net Corporation reported that the company had filed with the Federal Communications Commission (FCC) in Washington, D.C., for authorization to construct a 40 Gbps undersea (buried to 4,900 feet) fiber optic cable with capacity of more than 530,000 simultaneous connections between the United States and the Republic of Cuba. The project consists of approximately 180 kilometers of undersea cable and two landing points. Quest Net Corporation reports that the company has not initiated discussions with the Ministry of Communications of the Republic of Cuba, choosing to await a decision by the FCC. “Projecto Unidad,” as the initiative is being referred, seeks to “open broadband applications with security for educational, scientific and commercial users and greatly enhance the availability and use by residents of the Republic of Cuba. The Internet will be more readily available to residential users facilitating communication between the average citizen and the world with a primary link with the United States. With the change in the political atmosphere and the emergence of a more open relationship between Cuba and major world powers, the demand for bandwidth and voice capacity is expected to grow sharply as the Cuban economy continues to develop and diversify.” The overall cost of the project is estimated to be approximately US$13,000,000.00 and would require twelve months to implement. Currently, fiber optic connectivity does not exist between the Republic of Cuba and other countries. Within the last five years, several United States-based telecommunications companies have made similar proposals to the FCC, all of which were eventually rejected by the Bureau of Export Administration (BXA) of the United States Department of Commerce on the basis of concerns about technology transfers to the Republic of Cuba. New York City-based AT&T Corporation has one copper cable that was installed more than 40 years ago, which is being used to transmit telephone service between the United States and the Republic of Cuba. Direct telephone services between the United States and the Republic of Cuba were re-established in 1993. The “Projecto Unidad” system is being designed primarily for data and will only carry Internet and data traffic. Quest Net Corporation will not be involved in the settlement of telephone tariffs. A feasibility study has been completed by Spring Lake, New Jersey-based SetWave Communications, which specializes in management and design of Fiber Optics undersea cables. SetWave Communications has been awarded the management contract for the construction and installation of the cable. Quest Net Corporation is negotiating with Morris Town, New Jersey-based Tyco Submarine Systems (TSS), a subsidiary of Exeter, New Hampshire-based Tyco International (1998 revenues US$13.5 billion) to construct and to install the cable. Tyco Submarine Systems, formerly known as AT&T Submarine Systems, was sold by AT&T Corporation to Tyco International in 1998. TSS is the largest supplier of submarine cable systems in the world, having installed more than 155,000 miles of undersea cable. Quest Net Corporation operates its own OC-12 (622Mbps) Fiber optic self-healing SMARTRing backbone running from Key West, Florida, to Sebastian, Florida. The company is a provider of secure, full-service global Internet and Intranet broadband digital networking solutions for businesses and individuals. Quest Net Corporation is one of the largest regional Internet Service Providers with Dial-up POP’s (point-of-presence) in 228 cities and with more than 2,000 clients, mostly small businesses. The company also offers dedicated high-speed Internet access, metropolitan and wide area network data transport services, including virtual private networks, to several commercial clients and other ISP's, and Wireless Internet Connection at a speed of up to three Mbps to a distance of eight miles on a license free spectrum. Quest Net Corporation offers one of the fastest and cleanest routing system for the transfer and delivery of voice, video and data streams at speeds ranging from 64 Kbps to 155 Mbps (OC-3), as well as frame relay connections at speeds up to 45 Mbps. For information, contact Mr. Thomas Runzo, Manager- Sales and Marketing of Quest Net Corporation at telephone: (305) 935-1080; facsimile: (305) 935-1031; E-mail: shepp@jpquest.com; Internet: http://www.jpquest.com SPECIAL MEMBER UPDATE ON U.S. HEALTHCARE EXHIBITION IN CUBA- Attached to this issue of the ECONOMIC EYE ON CUBA©, is a special member update from Westport, Connecticut-based PWN Exhibicon International L.L.C. regarding the U.S. Healthcare Exhibition being held from 25 January 2000 to 29 January 2000 at the Pabexpo convention center in the city of Havana, Republic of Cuba. [Please See Attachment]. UNITED STATES MEDICAL STUDENTS PAY TUITION IN CUBA- An increasing number of individuals subject to United States law who are students at United States-based medical schools are enrolling in six week courses to eight week courses within in the Republic of Cuba. According to New York City, New York-based Medicc, a not-for-profit organization that makes arrangements for the courses, in 1999 more than 100 medical students from 48 United States-based medical schools will pay the Ministry of Public Health of the Republic of Cuba (MINSAP), through its subsidiary, Unidad Central de Cooperacion Medica, fees ranging from US$2,200.00 to US$2,500.00 to attend the courses. The medical students receive credit from their respective United States-based medical schools. MINSAP has increasingly sought non-Republic of Cuba national medical students as a source of funds to maintain and to provide equipment for Republic of Cuba-based medical schools, in 1998 accepting 850 non-Republic of national medical students. MINSAP charges US$50,500.00 for tuition, plus room and board, for six years of basic medical (including dentistry) studies, while specialties requiring an additional three years to four years in additional training range in cost from US$6,600.00 and US$8,900.00 on an annual basis. Nursing school tuition is US$6,500.00 for each of the first two years, and US$7,500.00 for each of the last three years. Basic nursing courses and basic medical technician courses are US$3,000.00 on an annual basis; and room and board are US$13.00 per day. DAIMLERCHRYSLER WINS US$200 MILLION BUS CONTRACT OVER VOLVO- Stuttgart, Germany-based Mercedes-Benz AG, a subsidiary of Stuttgart, Germany-based DaimlerChrysler AG, and Brazil-based Busscar, an unlisted maker of car parts, have signed a US$200 million multi-year contract with the Ministry of Transportation of the Republic of Cuba for parts needed to assemble 1,400 buses. Gotenborg, Sweden-based AB Volvo had been bidding for the contract. H.E. Alvaro Perez Morales, Minister of Transportation of the Republic of Cuba, recently reported that an agreement would soon be announced with unnamed non-Republic of Cuba-based companies for the purchase of parts to assemble 300 buses within in the Republic of Cuba, at a reported cost of US$70,000.00 per bus. Minister Morales reported the Republic of Cuba ideally would require approximately 7,000 buses, spare parts, etc. Minister Morales reported in April 1999 that US$27 million had been spent for parts to assemble 300 urban buses in 1999, presumably the same 300 buses included in the new announcement. Previously, subsidiaries of the Ministry of Steel, Mechanical, and Electronic Industry of the Republic of Cuba (SIME) have assembled buses using chassis produced in Brazil and engines produced by Daimler Chrysler AG. The Republic of Cuba has imported bus parts and bus motors for public transportation and use by the tourism industry from AB Volvo, Daimler Chrysler AG, and from various companies in Brazil. Seoul, South Korea-based Hyundai Group recently reported that the company was interested in selling bus chassis to the Republic of Cuba. CORRECTION AND NEW INFORMATION ON GRUPO SOL MELIA- In the 31 May 1999 to 6 June 1999 issue of the ECONOMIC EYE ON CUBA©, the item SHERRITT INTERNATIONAL REMARKS ABOUT CUBA INVESTMENTS contained an error. The percentage of the total revenues of Madrid, Spain-based Grupo Sol Melia derived from its Republic of Cuba-based operations was stated as being approximately 9% in 1998. The correct percentage is 11.8%. Not available at the time was the percentage of Grupo Sol Melia’s total assets that are located within the Republic of Cuba. The amount has since been confirmed to be less than 2%. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury permits individuals subject to United States law to directly or indirectly control shares in Grupo Sol Melia, which owns, leases, manages, or franchises 252 properties in 25 countries, including the management and/or equity in 12 properties with a combined 4,198 rooms located within the Republic of Cuba. Individuals subject to United States law hold approximately 16% of the publicly traded shares of Grupo Sol Melia. The OFAC authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba. [OFAC 4 March 1994]. SHERRITT CONSIDERS
ESTABLISHING SEPARATE COMPANY FOR CUBA BUSINESS- Reportedly, executives
of Toronto, Canada-based Sherritt International Corporation, the second-largest
investor within the Republic of Cuba, have considered “spinning off” Republic
of Cuba-related business activity into a separate publicly held company
to decrease and/or to eliminate exposure within the Republic of Cuba.
Such a decision by Sherritt International Corporation could have a substantial
effect and sustaining effect upon the overall perception by global companies
as to the role of capital investment within the Republic of Cuba and sourcing
of capital investment for the Republic of Cuba. Discussions on the
subject have also taken place amongst senior-level executives of Canada-based
financial institutions. A decision to “spin off” Republic of Cuba-focused
operations into a separate company could enable Sherritt International
Corporation to re-focus approximately US$360 million remaining from a
December 1996 CA$675 million (approximately US$473 million) convertible
debenture offering to investments in Canada and in other countries, such
as Australia, Africa, and the United States. If Sherritt International
Corporation “spins off” its Republic of Cuba-focused operations, specifically
assets, then Sherritt International Corporation might then be available
to investors who are individuals subject to United States law. In
1996, Sherritt International Corporation represented that the proceeds
from the 1996 convertible debenture offering would be directed primarily
to opportunities within the Republic of Cuba and, to a far lesser extent,
to opportunities within other countries. Mr. Ian W. DeLaney, Chairman
of Sherritt International Corporation, speaking at the recent annual shareholders
meeting, said that the company would look to make investments in countries
other than the Republic of Cuba because “there’s a limit to the rate
of which you can invest in Cuba that’s limited by their infrastructure.”
In speaking about the overall performance of the company with respect
to share price, Mr. DeLaney said, “We would not want to leave anyone
with the impression that this has been a satisfactory investment.
It has not.” In 1998, approximately 16% of the total revenues
of Sherritt International Corporation were derived from Republic of Cuba-related
activities. In 1998, approximately 66% of the total assets of Sherritt
International Corporation were Republic of Cuba-related. In 1997,
approximately 11% of the total revenues of Sherritt International Corporation
were derived from Republic of Cuba-related activities. In 1997, approximately
63% of the total assets of Sherritt International Corporation were Republic
of Cuba-related. [Please see following chart.]
UNITED STATES TELECOMMUNICATIONS PAYMENTS- Pursuant to provisions of the 1992 Cuban Democracy Act (CDA), the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., has reported US$40,021,143.00 in payments by United States-based telecommunications companies to Republic of Cuba government-operated Empresa de Telecommicaciones de Cuba S.A. (ETECSA) for the period 1 July 1998 to 31 December 1998. The payments for the period 1 January 1998 to 30 June 1998 were US$39,519,648.00. The OFAC has, since 1992, issued eight licenses to United States-based telecommunications companies for transactions incident to the receipt or transmission of telecommunications between the United States and the Republic of Cuba. Since November 1994 when direct-dial long distance telephone services were actually re-established between the United States and the Republic of Cuba, annual gross revenues to United States-based long distance telephone service companies have increased from US$10.3 million prior to 1993 to a projected US$160 million in 1998. United States law requires that per minute charges be shared on a 50-50 basis between United States-based long distance telephone service companies and the government of the Republic of Cuba based upon a maximum of US$1.20 per minute cost from which the government of the Republic of Cuba can be paid. United States-based long distance telephone service companies have charged above the US$1.20 per minute cost to some United States-based customers, particularly commercial users, thus retaining a larger share of the per minute overall revenues. The majority of the long distance traffic between the United States and the Republic of Cuba, approximately 65%, at an average per minute cost of US$.74 per minute, is residential use by individuals of Cuban descent speaking with their relatives who reside within the Republic of Cuba. United States-based long distance telephone service companies reported that the average per minute costs are above US$1.20 per minute, reflecting a higher (and increasing) volume of commercial users paying approximately US$1.60 per minute. To date, only the “first-tier” long distance telephone service companies have been approved by the government of the Republic of Cuba to provide services, despite a continuing and increasing interest by at least ten “second-tier” companies (such as resellers) to directly enter the market.
CANADIAN MINING COMPANY RETAINS UNITED STATES FINANCIAL ADVISOR- Toronto, Canada-based Holmer Gold Mines Limited (TSE: HGM) has retained New York City, New York-based CPM Group to serve as “exclusive financial advisor and to seek adequate financing… for short-term and long-term development programs.” CPM Group is being paid to prepare a due diligence report and a valuation study for both the Loma Hierro silver mine located in the Pinar del Rio Province of the Republic of Cuba and for the Timmins gold project located in Ontario, Canada. CPM Group is considered to be the foremost precious metals research and consulting company in the world. CPM Group clients have included Vancouver, Canada-based Placer Dome Incorporated; Denver, Colorado-based Newmont Mining Corporation; and New York City, New York-based Soros Fund Management among others. CPM Group supplies research and consulting services to an affiliated company, CPM Management Company, which is a money management investment fund company. Holmer Gold Mines Limited owns 100% of the Timmins gold project. A recent drill program outlined a gold deposit with a drill indicated resource of 1.96 million tons grading 7.97 gm gold/ton or 2.14 million tons grading 0.23 ounces gold/ton, totaling 500,000 ounces. Holmer Gold Mines Limited owns 50% of the Loma Hierra silver mine. The remaining 50% is owned by Republic of Cuba government-operated GeoMinera S.A., which is affiliated with the Ministry of Basic Industry of the Republic of Cuba. A recently completed feasibility study completed by Holmer Gold Mines Limited on the Loma Hierro silver mine confirmed that the project is economically viable based on an open-pit, vat-leach silver mine. Recent drilling outlined a volcanogenic base metal deposit at the San Fernando Project within the Republic of Cuba which is currently estimated to contain 440,000 tons averaging 2.19% copper and 4.51% zinc, and silver 3.67 oz/ton and additional 600,000 tons of lower grade material. Additional drilling is planned. According to Holmer Gold Mines Limited, in order the production to commence within the Republic of Cuba there remains 1) a final operating agreement to be signed with GeoMinera S.A. 2) Holmer Gold Mines Limited must obtain financing of US$7 million and 3) GeoMinera S.A., must obtain financing of US$3.5 million. Holmer Gold Mines Limited reports that US$3 million to US$15 million in financing is required to bring the Timmins gold project into production. If the due diligence report and the valuation study prepared by CPM Group are satisfactory (confirming the information provided to CPM Group by Holmer Gold Mines Limited), CPM Group will then serve as a consultant to Holmer Gold Mines Limited in seeking sources of financing. Holmer Gold Mines Limited reports that if the Timmins gold project and the Loma Hierro silver mine are placed into production simultaneously, the majority of the revenues of Holmer Gold Mines will be derived from operations within Canada. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba. [OFAC 4 March 1994]. STARWOOD PERMITS POINTS TRANSER TO MEXICANA AIRLINES FOR TRAVEL AWARDS TO CUBA- White Plains, New York-based Starwood Hotels & Resorts Worldwide, Inc. (1998 revenues exceeding US$6 billion) has begun to permit members of its Starwood Preferred Guest program to transfer points (on a one-to-one basis) to Mexico City, Mexico-based Mexicana de Aviacion’s (Mexicana) Frecuenta Mexicana mileage program. Mexicana services the Republic of Cuba with nonstop flights and connecting flights to the city of Havana from Mexico City, Cancun, and Merida. Mexicana has an office in Havana. Individuals subject to United States law who are members of Frecuenta Mexicana can use points in their accounts for airline tickets to/from any location serviced by Mexicana. Points in Frecuenta Mexicana can be earned through Hilton Hotels, Holiday Inn, Radisson Hotels, Diners Club card charges, American Express card charges, and Avis vehicle rentals. Mexicana has a code-share agreement with Elk Grove Township, Illinois-based United Airlines. U.S. MEDICAL/HEALTHCARE EXHIBITION SCHEDULED FOR 25 JANUARY 2000- Westport, Connecticut-based PWN Exhibicon International L.L.C., has confirmed that the U.S. Medical/Healthcare Exhibition will be held in the city of Havana from Tuesday, 25 January 2000, to Saturday, 29 January 2000. The U.S. Medical/healthcare Exhibition has been licensed by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. Individuals authorized to participate in the U.S. Medical/Healthcare Exhibition include executives and representatives of United States-based companies and their subsidiaries that manufacture, distribute, market, and retail, health care sector informational materials, medical equipment, medical instruments, medical supplies, medicated products, medicines, and pharmaceuticals. For information regarding participation, sponsorship, and costs, please contact Mr. Peter W. Nathan at telephone (203) 222-8660 or facsimile telephone (203) 222-8335. JUNE 1999 ISSUE OF CIGAR AFICIONADO HAS SALES INCREASE OF 62% IN CUBA- The June 1999 issue of Cigar Aficionado magazine thus far has an increase in distribution of 62% above the previous issues of the magazine distributed within the Republic of Cuba. The cover story of the June 1999 issue is “CUBA: Is It Time To End The Embargo?” and the issue contains a “Complete Travel Guide For Americans.” Cigar Aficionado, which has the largest distribution within the Republic of Cuba of any United States-published magazine, is published by New York City, New York-based M. Shanken Communications, Inc. Other magazines published by M. Shanken Communications include: Wine Spectator, Food Arts, Impact, Impact International, Market Watch, Hamptons Country, Aspen Country, and the Cigar Insider newsletter. UNITED STATES CITIZENS PARTICIPATE IN REGATTA AND MARLIN TOURNAMENT- Mr. Jose Miguel Diaz Escrich, Director of the Hemingway Marina and Nautical Club, a subsidiary of the Republic of Cuba government-operated Cubanacan S.A., reported that 292 United States-registered vessels would participate in sailing events and in fishing events within the Republic of Cuba from 31 May 1999 to 5 June 1999. Mr. Diaz reported that 242 boats and more than 1,000 individuals subject to United States law were expected to participate in the annual Havana Cup Regatta from Tampa, Florida, to Havana; and that an additional 50 vessels were expected to participate in the annual Ernest Hemingway Marlin Tournament. Mr. Diaz reported that Republic of Cuba government-operated companies and Republic of Cuba-based joint ventures were sponsoring the events, including payments (entry fees, fuel, electricity, etc. at the Hemingway Marina and Nautical Club), thus complying with Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., regulations for “fully hosted travel” to the Republic of Cuba for individuals subject to United States law. The OFAC defines the term “fully hosted” as all expenses within the Republic of Cuba (including travel to and from the Republic of Cuba if using a Republic of Cuba government-operated air carrier, such as Cubana Airlines, or other means of transportation operated by a Republic of Cuba government-operated entity) on behalf of the individual subject to United States law are paid for by an individual or entity not subject to United States law. No direct or indirect payments are permitted. A “fully hosted” traveler may return to the United States with an unlimited amount of informational materials (books, magazines, newspapers, music tapes, video tapes, etc.) and an unlimited amount of artwork. A “fully hosted” traveler may not return to the United States with any other Republic of Cuba-produced products (such as cigars, rum, coffee, tee shirts, etc.). Of 1,500 vessels that docked at the Marina Hemingway in 1998, approximately 60% were United States registered. RE/MAX INTERNATIONAL REPORTS UNAUTHORIZED USE OF TRADEMARK IN CUBA- Greenwood Village, Colorado-based RE/MAX International, Inc., reports that the company has discovered the unauthorized use of RE/MAX trademarks relating to activities within the Republic Cuba. The company has reported the unauthorized activity to the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., and to the United States Department of State in Washington, D.C. Mr. Daryl Jesperson, President of RE/MAX International, issued the following statement: “Recently, we discovered that someone was using the RE/MAX name and trademarks in connection with the promotion of certain business activities relating to Cuba…. RE/MAX International has not authorized any one to utilize the RE/MAX name or trademarks in connection with any business connected with Cuba…. We are incensed that someone has had the audacity to blatantly and illegally utilize the RE/MAX name, a symbol of quality which thousands of hard working, dedicated professional real estate practitioners have diligently promoted and protected for 26 years.” According to representatives of RE/MAX International, the actions by the company were the result of a citizen of the United Kingdom who resides within the Republic of Cuba authorizing the RE/MAX International trademark to be used in conjunction with the marketing of a business conference organized by a Washington, D.C.-based consulting company. The right to operate a RE/MAX International real estate franchise within the Republic of Cuba has been held, since November 1991, by San Juan, Puerto Rico-based RE/MAX of the Caribbean Basin, Inc., an independently owned and operated franchise of RE/MAX International. For additional information, contact Mr. Patrick Murphy at telephone (787) 728-8249. In June 1998, Parsippany, New Jersey-based Coldwell Banker Real Estate Corporation (1998 turnover exceeding US$100 billion), a subsidiary of Parsippany, New Jersey-based Cendant Corporation (1998 revenues exceeding US$5 billion), awarded a master franchise agreement for Bermuda and 30 Caribbean Sea-area countries (encompassing 750 islands) to Cayman Islands-based Coldwell Banker Island Affiliates. The master franchise agreement includes provisions (right of first refusal) for the Republic of Cuba. The President of Coldwell Banker Island Affiliates, Mr. J.C. Calhoun, is an individual subject to United States law who resides in the Cayman Islands and is the President of Coldwell Banker Cayman Islands Realty. Coldwell Banker Island Affiliates is a company which is controlled by individuals not subject to United States law. Coldwell Banker Island Affiliates reports receiving an increasing number of inquires from individuals seeking to obtain the franchise for the Republic of Cuba, with offers in excess of US$1 million. When awarded, however, Coldwell Banker Island Affiliates reports that because of the size of the Republic of Cuba, there may be multiple franchises awarded for the country. Coldwell Banker franchises more than 2,800 independently-owned and independently-operated real estate offices with a combined 62,000 sales associates. Coldwell Banker Real Estate Corporation joins an increasing number of United States-based companies that are including the Republic of Cuba in franchise agreements, license agreements, distributorship agreements, and agency agreements for commercial activity within the Republic of Cuba. OFAC AND BXA ANNOUNCE NEW REGULATIONS- On 13 May 1999, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., and the Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., published in the Code of Federal Regulations (CFR) (Federal Register) (Volume 64, No. 92, page 25808 to page 25820 and 15 CFR Chapter VII, Subchapter C, Part 746) the regulations governing the changes in policy toward the Republic of Cuba announced on 5 January 1999 by The Honorable William J. Clinton, President of the United States of America. Some of the 5 January 1999 changes in policy toward the Republic of Cuba were authorized by the Cuban Democracy Act (CDA) when signed into law by then President George H.W. Bush in October 1992 and in the Cuban Liberty and Democratic Solidarity (Libertad) Act signed into law by President Clinton in March 1996. The most significant changes from what had been expected are 1) that the exportation to the Republic of Cuba of agricultural equipment is not, at this time, being permitted and 2) that “trade financing” with respect to the commercial sale of food or agricultural commodities to the Republic of Cuba of food is not, at this time, being permitted. However, senior-level officials of the government of the United States have suggested that United States-based companies, along with their non-United States-based subsidiaries, be “creative” in submitting proposals for exports to the Republic of Cuba, including components such as financing. The following is a summary of the new OFAC regulations and BXA regulations, using much of the language contained in the text of the Federal Register:
2. The Per Diem rate for expenses within the Republic of Cuba that had been US$100.00, has been increased to US$183.00 (US$102.00 for lodging and US$82.00 for meals). The new Per Diem rate will now be the same as the Per Diem Rate For Foreign Areas issued by the Office of Allowances within the Office of Operations of the Bureau of Administration of the Under Secretary of Management of the United States Department of State in Washington, D.C. The US$183.00 Per Diem rate has been in effect since December 1996. From November 1995 to November 1996, the Per Diem Rate For Foreign Areas- Republic of Cuba, was US$155.00 (US$90.00 for lodging and US$64.00 for meals). [As of August 1999, the Per Diem rate was US$195.00]. 3. OFAC licenses may now be issued for travel-related and other transactions for humanitarian projects including 1) medical-related 2) health-related 3) environmental 4) small-scale enterprise 5) agricultural projects 6) rural development projects 7) non-formal educational training 8) adult literacy 9) adult vocational skills and 10) community-based grass-roots projects. 4. Pursuant to section 211 of Division A, Title II, of the 1999 Omnibus Consolidated and Emergency Supplemental Appropriations Act (Public Law 105-277, H.R. 4328) any transaction or payment to the Republic of Cuba with respect to a mark, trade name, or commercial name that is the same as or substantially similar to a mark, trade name, or commercial name that was used in connection with a business or assets that were confiscated by the government of the Republic of Cuba, is only permitted if the original owner of the mark, trade name, or commercial name or the bona fide successor-in-interest has expressly consented. [See 11 May 1999 article from The Miami Herald] 5. The BXA may approve applications for exports of food (both solids and liquids) and agricultural commodities for use by independent non-governmental entities within the Republic of Cuba. Such entities may not be controlled, owned or operated by the Cuban government. Unclear is whether the BXA will permit an entity controlled by the government of the Republic of Cuba to be the “purchaser” but not the “end user.” For example, Form BXA-748P, the BXA Multipurpose Application Form for exports to the Republic of Cuba and other countries, provides that an “Ultimate Consignee” may be “government purchasing organizations.” In addition, Form BXA-748P provides for designations of “Intermediate Consignee,” “Original Ultimate Consignee,” and “End-User.” If an entity controlled by the government of the Republic of Cuba can be the “purchaser” of bulk food commodities and agricultural commodities, United States exports to the Republic of Cuba during the next twelve months to eighteen months could exceed US$300 million. If an entity controlled by the government of the Republic of Cuba is not authorized to be the “purchaser” of bulk food commodities and agricultural commodities, United States exports to the Republic of Cuba during the next twelve months to eighteen months could be less than US$100,000.00. 6. When submitting applications to the BXA, applicants must demonstrate on the BXA license application that the prospective end-user or class of end-users is independent from the Cuban government. Include such information in Block 24, Additional Information, on Form BXA-748P. The United States Government will review this information within 30 days. 7. Independent non-government entities include, but are not limited to, religious groups, private farmers, and private sector undertakings such as family restaurants (known as “paladares”). 8. Agricultural commodities that will be considered for approval include, but are not limited to, insecticides, herbicides, pesticides, seeds, and fertilizer. Agricultural equipment is not eligible under this paragraph (b) (4) (iii) for sale to Cuba. 9. The OFAC will generally authorize financial transactions (e.g., purchase price, shipping and handling charges) related to export sales of food or agricultural commodities specifically authorized by the BXA. Therefore, an export sale of food authorized by the BXA will not require additional specific authorization from the OFAC for shipping, obtaining payments, or other financial transactions. Licenses may be authorized to pay for customary land reasonable warehousing and transportation services within the Republic of Cuba. 10. Exporters are advised to indicate on their BXA license applications for the export of food and agricultural commodities whether they plan to deliver such commodities to Cuba by vessel or aircraft. An export license must be obtained from the BXA for vessels to transport licensed commodities to Cuba. Authorization for the vessel and for necessary ship stores may be requested at the time of application for the export of food or agricultural commodities for sale in Cuba. However, note that authorization must be obtained from the OFAC for the return of such vessels to the United States within 180 days of leaving Cuba. The OFAC is publishing in the Federal Register a separate regulation that allows the return of such vessels under a General License, provided that all items have been authorized via applicable Federal regulations. Aircraft flying to Cuba to deliver commodities licensed under this policy must be eligible for License Exception AVS (see §740.15 of the EAR) or must be specifically licensed by the BXA. 11. The BXA may review license applications, with a presumption of approval, requesting authorization to use private aircraft for temporary sojourn for travel to Cuba involving educational, cultural, journalistic, religious, athletic exchanges, humanitarian assistance, and other people-to-people contacts. This policy is applicable to temporary sojourn flights from the United States to Cuba of aircraft not eligible for BXA License Exception AVS (see §740.15 of the EAR), and that require specific authorization from the BXA. Note that aircraft may fly on regularly scheduled charter flights to Cuba generally under License Exception AVS. The OFAC must authorize travel by U.S. persons associated with such flights. Any commodities included on the aircraft that do not qualify for License Exception BAG (see §740.14 of the EAR) or License Exception TMP (see §740.9 of the EAR) require a specific BXA license authorizing the export of such items to Cuba. 12. The United States is also seeking to reestablish direct mail between the United States and Cuba. This measure requires the agreement of the Cuban government. BXA reminds exporters that the mailing of gift packages through the United States mail still constitutes an export and must meet the content, frequency and dollar value requirements of §§746.2(a)(1)(viii) and 740.12 of the EAR, or be specifically licensed by the BXA. 13. Any individual subject to United States law who is at least 18 years of age or older may make remittances of up to US$300.00 in any consecutive three-month period to the household of any individual within the Republic of Cuba, provided that the individual is not currently a senior member of the government of the Republic of Cuba or currently a senior official of the Communist Party of the Republic of Cuba. 14. Individuals subject to United States law who have “close relatives” residing within the Republic of Cuba are now entitled to one visit to the Republic of Cuba every twelve months under a general OFAC license for a self-defined “humanitarian need.” Previously, one visit to the Republic of Cuba every twelve months under a general OFAC license could only be made for a self-defined “extreme humanitarian need.” The new OFAC licensing policy will permit a substantial increase in general licensed travel to the Republic of Cuba by individuals subject to United States law who have “close relatives” residing within the Republic of Cuba. 15. OFAC licenses may now be issued to academic institutions (including, for the first time, secondary schools) and religious organizations. The academic institution and religious organization is then authorized by the OFAC to provide letters to individuals affiliated (students, teachers, employees, representatives, etc.) with the academic institution or religious organization for travel to the Republic of Cuba. Thus, rather than the academic institution and religious organization being required to obtain individual OFAC licenses for each individual affiliated with the academic institution or religious organization, the academic institution and religious organization may issue the required travel documents. OFAC TO INCREASE
DAILY PER DIEM FROM US$100.00 TO US$183.00- The Office of Foreign
Assets Control (OFAC) of the United States Department of the Treasury
in Washington, D.C, will increase the Per Diem allowance for individuals
subject to United States law visiting the Republic of Cuba. There
has been continuing criticism and increasing criticism as to why employees
of the United States government traveling to the Republic of Cuba, with
funds provided by the United States taxpayer, have had a regular increase
in their Per Diem, while individuals subject to United States law who
are not employees of the United States government traveling to the Republic
of Cuba have incurred a substantial decrease in their purchasing power-
at least 16% from November 1995 to December 1996 alone. For at least
fourteen years, the Per Diem for individuals subject to United States
law traveling to the Republic of Cuba who are not employees of the United
States government has been US$100.00 (no separation for lodging and meals),
during which period of time costs for hotels, costs for meals, and costs
for ground transportation within the Republic of Cuba have increased threefold-
or more, in many instances. The new Per Diem rate, US$183.00 (US$102.00
for lodging and US$82.00 for meals), is equal to the Per Diem Rate For
Foreign Areas issued by the Office of Allowances within the Office of
Operations of the Bureau of Administration of the Under Secretary of Management
of the United States Department of State in Washington, D.C. The
US$183.00 Per Diem rate has been in effect since December 1996.
From November 1995 to November 1996, the Per Diem Rate For Foreign Areas-
Republic of Cuba, was US$155.00 (US$90.00 for lodging and US$64.00 for
meals). VERDICT IN COURT
CASE COULD NULLIFY 400 UNITED STATES COMPANY TRADEMARKS IN CUBA- A
verdict in a case currently before a Federal Court in New York City may
cause the government of the Republic of Cuba to nullify the protection
of an estimated 400 trademarks registered within the Republic of Cuba
by United States-based companies. The case involves Section 211,
which was contained in the 4,000-page Omnibus Budget Act of 1998.
Section 211 provides, under certain conditions, to negate Republic of
Cuba-origin trademarks of the protections of United States law.
Until Section 211 was enacted, the United States and the Republic of Cuba
granted reciprocal protection to each other’s trademarks under the 1931
Convention on the Protection of Trademarks. An internal memorandum obtained
from the Office of the United States Trade Representative (USTR) memorandum
addressed to The Honorable Charlene Barshefsky, United States Trade Representative,
refers to Section 211 as follows: “Trademarks/TRIPS - Senator
[Connie] Mack [R-Florida] inserted language into the omnibus appropriations
bill that prohibits U.S. courts from enforcing trademarks held by a designated
national or successor-in-interest that was used with a business that was
confiscated. This provision addresses a long-standing dispute between
the Cuban government and [Hamilton, Bermuda-based] Bacardi rum.
The language is problematic because it violates our obligations under
the TRIPs agreement.” [The complete text of the USTR memorandum is
reproduced in the 27 November 1998 issue of the Washington, D.C.-based
publication, Inside U.S. Trade]. The Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS) sets out obligations relating
to intellectual property rights that are applicable to all members of
the World Trade Organization (WTO). These obligations include the
protection of trademark rights and impose obligations on members of the
WTO to provide administrative and judicial mechanisms to enforce intellectual
property rights. Ms. Lynne Beresford, an attorney in the Office
of Legislative and International Affairs of the United States Patent and
Trademark Office (USPTO) in Arlington, Virginia, was quoted in the November
1998 issue of the monthly newsletter, CubaNews, which was,
at the time, owned by the Miami, Florida-based newspaper, The Miami
Herald: “We’re certainly out there pushing people to protect international
property.” The article continued: “Beresford said international
reaction to the Bacardi amendment could take several forms. Cuba
may interpret the provision as an abrogation of their right under the
1931 Interamerican Convention on Trademarks to file and maintain a trademark
in the United States. In retaliation, Cuba could argue that it is relieved
of its treaty obligation to recognize some 400 U.S. trademarks registered
in Cuba, including Hilton, Coca-Cola and Palmolive.” On 8 January
1999, H.E. Ricardo de Alarcon de Quesada, President of the National Assembly
of People’s Power of the Republic, made the following remarks (unofficial
translation): “Section 211 of that law on the budget, simply violates
the most basic principles of intellectual property, the trademarks and
patents that are universally accepted, establishing that US courts cannot
recognize any right to any trademark or patent of any foreign company,
a foreign company, not a US company, that is allegedly linked to properties
that were allegedly owned by a North American now… Of course, trademarks
and patents do not exist for one side only and the right and responsibilities
and the respect for international norms must work in all directions.
There are trademarks and patents here that belong to US firms. It
is not only one trademark in the US market… You can get US trademarks
here and they know it. Trademarks and patents owners should be worried
about the irresponsibility of a government that can incur in actions that
will not fail to provoke a reaction…” The text of Section 211
of the Omnibus Budget Act of 1998 is available from the U.S.-Cuba Trade
and Economic Council. A listing of some of the United States-based
companies with trademarks registered within the Republic of Cuba is attached
to this issue of the ECONOMIC EYE ON CUBA©. BALTIMORE ORIOLES TO PLAY IN HAVANA ON 28 MARCH 1999- The Baltimore, Maryland-based Baltimore Orioles Major League Baseball Team is scheduled to play one exhibition game against the Republic of Cuba government-operated National Team on 28 March 1999 at the Latinamericanos Stadium in the city of Havana. Net proceeds from the game are expected to primarily be used to support athletic programs in both the Republic of Cuba and in the United States. OFAC HIRES ADDITIONAL STAFF- The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., has added an additional staff member in its licensing division. This individual is assisting with the routing of inquiries as a part of an effort by the OFAC to improve response time. UNITED STATES POSTAL SERVICE AGREEMENT COULD STRENGTHEN DHL POSITION IN CUBA- The United States Postal Service in Washington, D.C., has announced an agreement with Redwood City, California-based DHL Worldwide Express, Inc., for the delivery of packages between New York City, New York; Boston, Massachusetts; Philadelphia, Pennsylvania; Charlotte, North Carolina; Phoenix, Arizona; San Francisco, California; Houston, Texas; Miami, Florida; Minneapolis, Minnesota; Chicago, Illinois; Washington, D.C., and eighteen countries in Europe. Brussels, Belgium-based DHL International Limited owns a minority share in DHL Worldwide Express. Government of Germany-operated Deutsche Post AG owns 25% of DHL International Limited. DHL Worldwide Express has authorization from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to provide delivery services between the United States and the Republic of Cuba. The delivery services are limited to documents, brochures, videotapes, compact discs, etc. DHL Worldwide Express sends packages from the United States to the Republic of Cuba through Mexico City, Mexico, where the packages are transferred from the operational control of DHL Worldwide Express to the operational control of DHL International Limited. The packages are then sent by commercial aircraft (Aeromexico and Mexicana de Aviacion SA de CV) to the Jose Marti International Airport in the city of Havana for delivery. The cost of sending a one pound package from the United States to the Republic of Cuba is approximately US$81.00. The cost of sending a one pound package from the Republic of Cuba to the United States is approximately US$39.00. The delivery time for packages sent from the United States to Havana, Republic of Cuba, is four days. The delivery time for packages sent from Havana, Republic of Cuba, to the United States is three days. DHL International Limited commenced operations within the Republic of Cuba in September 1990 through an agreement with Panama City, Panama-based UTISA, which is controlled by the Ministry of Communications of the Republic of Cuba. In 1998, DHL International Limited delivered from various countries approximately 80,000 packages to the Republic of Cuba. In 1998, DHL International Limited sent approximately 32,000 packages from the Republic of Cuba to various countries. DHL Worldwide Express, which is controlled by individuals subject to United States law, receives revenues from DHL International Limited for package delivery services to the Republic of Cuba. In January 1999, The Honorable William J. Clinton, President of the United States, announced that the United States was prepared to resume direct mail delivery between the United States and the Republic of Cuba. The government of the Republic of Cuba is prepared to accept the resumption of direct mail delivery, if assurances can be provided with respect to the transportation of dangerous articles and hazardous articles. One issue to be reconciled concerns international agreements which traditionally mandate the existence of commercial flight agreements between countries, in this case, authorization for Republic of Cuba government-operated Cubana de Aviacion aircraft to land in the United States and authorization for United States-based airlines to operate regularly-scheduled services to the Republic of Cuba. Neither Atlanta, Georgia-based United Parcel Service of America, Inc. (1998 revenues exceeding US$22 billion) nor Memphis, Tennessee-based FDX Corp. (1998 revenues exceeding US$15 billion) currently operate direct delivery services or indirect delivery services between the United States and the Republic of Cuba. NEW YEAR’S 2000 GALA PLANNED FOR HAVANA- London, United Kingdom-based Club Cuba XXI is organizing a New Year’s gala at the Hotel Nacional de Cuba in the city of Havana from 27 December 1999 to 2 January 2000. Club Cuba XXI is a group of entrepreneurs who have investment interests throughout The Americas, Europe, and in Asia. Three hundred guests from throughout the world have been invited to participate in the event, which will, in part, raise funds for Arriba los Carozones (Lift Your Hearts), a charity which “aims to promote welfare to all Cuban children.” Day One (27 December 1999) begins with a Welcome Reception in the Presidential Suite of the Hotel Nacional de Cuba featuring beverages such as the Mojito, Daiquiri, Havana Libre, and Havana Special served on a seaside terrace. That same evening, a “festive traditional dinner” on the rooftop of the Hotel Nacional de Cuba. Day Two (28 December 1999) includes a “cultural exploration” into “Old World Havana” with guests chauffeured by a fleet of 1957 Chevrolet vehicles. During the afternoon, a visit to El Floridita, the restaurant and bar made famous by the writer, Mr. Ernest Hemingway. A torch-lit dinner “infused” with the sounds of Cuban musicians, will be held on the 450-year-old Plaza de la Catedral, located in Old Havana, an area of the city declared a “Patrimony of Humanity” by the United Nations Educational, Scientific, and Cultural Organization (UNESCO). Day Three (29 December 1999) begins with a visit to the resort area of Varadero, 140 kilometers east of the city of Havana. Guests will relax at the former estate of the State of Delaware-based du Pont family, which has been converted to a club with an 18-hole golf course. Sailing, snorkeling, scuba diving, volleyball, and other activities are available. Lunch includes fresh lobster (langosta mariposa) and champagne. “Glamour a la Casablanca,” a theme dinner with guests attired in “Hollywood Nostalgia circa 1940’s,” will be served at the Habana Club. Day Four (30 December 1999) is spent with the Republic of Cuba’s principal literary, musical, cinematic, and artistic protagonists. In the morning, the Nobel Prize for Literature winner, Mr. Gabriel Garcia-Marquez, has been invited to give a private reading. Then a visit to the restaurant Bodequita del Medio, which has hundreds of signatures of the famous, infamous, and not so famous on its walls. Luncheon will be served at El Capitolio, the former seat of the Congress of the Republic of Cuba (the architecture of which was modeled on the United States Capitol building in Washington, D.C.), while listening to members of the National Philharmonic of the Republic of Cuba. In the afternoon, guests will enjoy a performance of the School of National Ballet of the Republic of Cuba at the Lorca Theatre. In the evening, dinner at the world famous Tropicana outdoor nightclub. Day Five (31 December 1999) in the morning, view a private exhibition by the prominent painter, Fabelo; take a stroll; visit the Partagas cigar factory; or go deep sea fishing on private yachts reserved for guests of Club Cuba XXI. In the evening, The Twenty-First Century Ball in the gardens of the Hotel Nacional de Cuba, with the sounds of “Los Van Van,” one of the most popular bands in the Republic of Cuba. Members of the Cabaret Parisian will perform a “fabulous spectacle.” Day Six (1 January 2000) begins with a choral mass celebrated at the Grand Cathedral in Old Havana, with the offering directed to Arriba los Corazones (Lift Your Hearts). In the evening, an elegant banquet at the Morro Castle, which has guarded the entrance to the Port of Havana since the 17th century. Members of the Buena Vista Social Club, a band comprised of some of the finest Cuban musicians, will perform. Day Seven (2 January 2000) begins and ends with a Farewell brunch at the Hotel National de Cuba, after which guests return “from where they came to begin the 21st century.” For information, contact Club Cluba XXI c/o Loewenstein Associates, 39 Thurloe Place, London SW7, United Kingdom; telephone: 011 44 171 838 1200; facsimile: 011 44 171 581 2053; E-mail: contact@cuba21.com; Internet: http://www.cuba21.com MERIDIEN ANNOUNCES MANAGEMENT AGREEMENT- North Vancouver, British Colombia, Canada-based Leisure Canada and Paris, France-based Meridien Gestion SA (a subsidiary of London, United Kingdom-based Forte Hotels which itself is a subsidiary of London, United Kingdom-based Granada Group Plc) which manages Le Meridien Hotels & Resorts have announced an agreement to develop the Le Meriden Village in Jibacoa, 40 kilometers east of the city of Havana. The new development will be similar to the Forte Village located in Sardinia, Italy, reportedly the company’s most profitable property. Forte Hotels manages more than 400 properties with a combined 54,000 rooms worldwide. Le Meridien Hotels & Resorts manages more than 90 properties with a combined 24,000 rooms worldwide. Le Meridien Hotels & Resorts will assist in the “design, development, and management” of three properties in Jibacoa. In November 1998, Meridien Gestion S.A. signed a Letter of Intent with Leisure Canada whereby Meridien Hotels & Resorts would manage and, perhaps, have an equity interest in, five hotels with a combined 1,000 rooms. The Letter of Intent stated that the initially-agreed three hotels would be in operation within 30 months of a final signed agreement between Meridien Gestion S.A. and Leisure Canada, which was expected to be signed by 31 December 1998. In February 1999, Leisure Canada Inc., announced the appointment of Mr. Simon F. Cooper as a member of the Board of Directors. Mr. Cooper is President of Toronto, Canada-based Marriott Lodging Canada and is Senior Vice President- Lodging, Canada Region for Washington, D.C.-based Marriott International, Inc. (1998 global revenues exceeding US$9 billion). According to a media release from Leisure Canada, “Mr. Cooper's appointment to the Board will greatly enhance an already dynamic management group that is committed to developing world class resorts in Cuba…. Leisure Canada is honored to have an individual of Mr. Cooper's internationally recognized stature agreeing to join our team and aid us in achieving the opportunities we are afforded in Cuba.” Undisclosed is whether Mr. Cooper and/or Marriott International, Inc., has now or plans to have a financial interest in Leisure Canada. Mr. Cooper previously served as President and Chief Operating Officer of Toronto, Canada-based Delta Hotels and Resorts (a subsidiary of Calgary, Alberta, Canada-based Canadian Pacific Limited), which had managed properties within the Republic of Cuba, but in 1998 ceased all activity within the Republic of Cuba. Leisure Canada, through its Wilton Properties subsidiary, plans to invest approximately US$400 million to develop within the Republic of Cuba hotels, marinas, golf courses, equestrian riding centers, cruise ship facilities, tennis courts, convention centers, health spas, retail facilities, and eco-tourism facilities in conjunction with Republic of Cuba government-operated Gran Caribe S.A., one of the three largest Republic of Cuba government-operated tourism companies. Other investors in Leisure Canada include Paris, France-based Societe General and Paris, France-based LCF Rothschild. Leisure Canada reports no current revenues from operations within the Republic of Cuba, but expects that within the next two years more than 51% of its revenues will be from operations within the Republic of Cuba. Leisure Canada also has a 20% interest in Saskatchewan, Canada-based Points North Digital Technologies, which, in turn, owns Mississauga, Canada-based TravelPlus, one of the three largest travel agencies (more than 200 locations) within Canada, and Dallas, Texas-based International Tours, with 1,100 locations throughout the United States. In 1997, San Francisco, California-based BancAmerica ROBERTSON STEPHENS Investment Management, an investment banking company with assets of US$2 billion specializing in emerging growth companies, purchased a 26.2% (fully diluted) investment in Leisure Canada. ROBERTSON STEPHENS Investment Management announced in November 1998 that it was being purchased by a group of investors, which included the company’s original founders. BancAmerica ROBERTSON STEPHENS is a subsidiary San Francisco, California-based BankAmerica Corporation (which recently merged with Charlotte, North Carolina-based NationsBank Corporation, the new entity having combined assets of US$572 billion). The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba. [OFAC 4 March 1994]. Leisure Canada has spoken with at least one United States-based financial public relations company about representation to increase in the visibility of Leisure Canada within the United States financial community. FORMER COCA-COLA EXECUTIVE, NOW POTENTIAL PRESIDENTIAL CANDIDATE, VISITS- His Excellency Vicente Fox Quesada, Governor of the State of Guanajuato, Mexico, and expected to be the candidate of the Democratic Action Party for the presidency of Mexico, visited the Republic of Cuba from 21 February 1999 to 24 February 1999. Governor Fox led a delegation of business executives from the State of Guanajuato. Governor Fox is a former president (he departed in 1980) of the Coca-Cola Export Corporation Sucursal de Mexico, a subsidiary of Atlanta, Georgia-based The Coca-Cola Company (1998 revenues exceeding US$18 billion). MILK PROCESSING JOINT VENTURE HAS UNITED STATES TIES- Asturia, Spain-based Penasanta S.A. (Capsa) has announced the establishment of a joint venture with the Ministry of Food Processing of the Republic of Cuba. The joint venture will initially only process and bottle powered milk imported from Spain. Capsa is controlled by Asturia, Spain-based Central Lechera Asturiana (66.6%) and Viroflay, France-based Bongrain S.A. (33.4%). Bongrain S.A. owns New Holland, Pennsylvania-based Bongrain Cheese USA; New Holland, Pennsylvania-based East Smithfield Farms; Louisville, Kentucky-based Fischer Packing Company; and Granada Hills, California-based Penguin’s Industries. The United States representative of the company is City of Industry, California-based Alta-Dena Certified Dairy. MARRIOTT EXECUTIVE JOINS BOARD OF CANADIAN COMPANY DEVELOPING CUBA TOURISM- North Vancouver, British Columbia, Canada-based Leisure Canada Inc. has announced the appointment of Mr. Simon F. Cooper as a member of the Board of Directors. Mr. Cooper is President of Toronto, Canada-based Marriott Lodging Canada and is Senior Vice President- Lodging, Canada Region for Washington, D.C.-based Marriott International, Inc. (1998 global revenues exceeding US$9 billion). According to a media release from Leisure Canada, Mr. Cooper “is responsible for overseeing all existing Marriott hotel brands in Canada and for fulfilling Marriott's goal of rapid hotel development…. Mr. Cooper's appointment to the Board will greatly enhance an already dynamic management group that is committed to developing world class resorts in Cuba…. Leisure Canada is honored to have an individual of Mr. Cooper's internationally recognized stature agreeing to join our team and aid us in achieving the opportunities we are afforded in Cuba.” Undisclosed is whether Mr. Cooper and/or Marriott International has or plans to have a financial interest in Leisure Canada. According a media release from Leisure Canada, “Mr. Cooper previously served as President and Chief Operating Officer of Toronto, Canada-based Delta Hotels and Resorts and was instrumental in the operations of several hotels in Cuba. Born in the United Kingdom, Mr. Cooper was educated in within the country and then earned an MBA from the University of Toronto. He began his hospitality career in 1970. In 1972, he worked for Canadian Pacific Hotels and Resorts. In 1982, he became Senior Vice President of Operations for Delta Hotels and Resorts. In 1989, he was promoted to President and Chief Operating Officer of Delta Hotels and Resorts. In 1998, Mr. Cooper departed Delta Hotels and Resorts to become President of Toronto, Canada-based Marriott Lodging Canada and Senior Vice President- Lodging, Canada Region for Washington, D.C.-based Marriott International, Inc. He was one of the principal forces behind the creation of the Canadian Tourism Commission (CTC). Leisure Canada, through its Wilton Properties subsidiary, plans to invest approximately US$400 million to develop within the Republic of Cuba hotels, marinas, golf courses, equestrian riding centers, cruise ship facilities, tennis courts, convention centers, health spas, retail facilities, and eco-tourism facilities in conjunction with Republic of Cuba government-operated Gran Caribe S.A., one of the three largest Republic of Cuba government-operated tourism companies. Other investors in Leisure Canada include Paris, France-based Societe General and Paris, France-based LCF Rothschild. Leisure Canada reports no current revenues from operations within the Republic of Cuba, but expects that within the next two years more than 51% of its revenues will be from operations within the Republic of Cuba. Leisure Canada also has a 20% interest in Saskatchewan, Canada-based Points North Digital Technologies, which, in turn, owns Mississauga, Canada-based TravelPlus, one of the three largest travel agencies (more than 200 locations) within Canada, and Dallas, Texas-based International Tours, with 1,100 locations throughout the United States. In 1997, San Francisco, California-based BancAmerica ROBERTSON STEPHENS Investment Management, an investment banking company with assets of US$2 billion specializing in emerging growth companies, purchased a 26.2% (fully diluted) investment in Leisure Canada. ROBERTSON STEPHENS Investment Management announced in November 1998 that it was being purchased by a group of investors, which includes the company’s original founders. BancAmerica ROBERTSON STEPHENS is a subsidiary San Francisco, California-based BankAmerica Corporation (which recently merged with Charlotte, North Carolina-based NationsBank Corporation, the new entity having combined assets of US$572 billion). The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba. [OFAC 4 March 1994]. Leisure Canada, has spoken with at least one United States-based financial public relations company about representation which would expectedly result in an increase in the visibility of Leisure Canada within the United States financial community. An increasing number of Canada-based companies with Republic of Cuba-related commercial activities are retaining United States-based legal counsel, retaining United States-based consultants, and becoming members of United States-based organizations. For additional information about Leisure Canada, contact Mr. Graeme Lempriere at telephone (888) 600-8687. PUERTO RICAN CEMENT COMPANY LOOKS TO RETURN TO CUBA- San Juan, Puerto Rico-based Puerto Rican Cement Company (1998 revenues US$148.4 million), the largest cement producer within Puerto Rico, said that the company expects to re-enter the Republic of Cuba market when permitted by the United States government. Puerto Rican Cement Company has three principal subsidiaries: cement, ready-mix concrete, and paper bag and polypropylene bag. Founded in 1938, the company is controlled (32%) by the family of Mr. Antonio Luis Ferre, who serves as chairman. Mr. Ferre’s family operated a cement plant in the Republic of Cuba in the 1950’s. Baltimore, Maryland-based T. Rowe Price Associates controls 9.4% of the outstanding shares in the company. As of 18 February 1999, the market value of Puerto Rican Cement Company was US$172.1 million. TELEPHONE SERVICES MAY BE SUSPENDED- The Cuban National Telecommunications Company (ETECSA), a joint venture created by the Ministry of Communications of the Republic of Cuba within which The Netherlands-based Stet International, a subsidiary of Rome, Italy-based Telecom Italia, has a 29% investment, reported that the company would suspend direct dial telephone service agreements with New York City, New York-based AT&T Corporation; Washington, D.C.-based MCI Worldcom; Jackson, Mississippi-based LDDS Communications; Miami, Florida-based IDB Communications; and Tulsa, Oklahoma-based Wiltel unless US$19 million in combined payments due from these companies for the last three months of 1998 and which were due to be paid to ETECSA on 31 January 1999, are not made by 12:01 a.m. on 24 February 1999. AT&T, MCI, WilTel, LDDS, and IDB, have been withholding payments due to having received writs of garnishment pending appeal of a lawsuit seeking to use the funds to collect damages (US$187.6 million) awarded in 1997 by a United States Federal Court in Miami, Florida, against the government of the Republic of Cuba in conjunction with a lawsuit commenced by relatives of three individuals subject to United States law of Cuban descent who were killed as a result of a shoot down by aircraft operated by pilots under the direction of the Revolutionary Armed Forces of the Republic of Cuba in February 1996. ETECSA said agreements with Kansas City, Kansas-based Sprint International and San Juan, Puerto Rico-based Telefonica Larga Distancia of Puerto Rico (TLDI) would not be suspended, as they were current on payments. Sprint is the provider of the Republic of Cuba’s Internet connections with other countries, and TLDI does limited Republic of Cuba transactions. Approximately 135 million minutes worth of telephone calls were placed between the United States and the Republic of Cuba in 1998, with approximately 90% of the telephone calls being placed from the United States to the Republic of Cuba. Direct dial telephone services were re-authorized by the Cuban Democracy Act signed into law by President George Bush in 1992. Direct dial telephone services were implemented in 1994. ETECSA received approximately US$85 million (including the US$19 million not yet received) in 1998 as its approximately 45% share of the revenues generated from United States-origin telephone calls, which average in cost from USS$.60 to US$1.00 per minute. 600 STUDENTS FROM THE UNITED STATES VISIT- The “Semester at Sea” passenger cruise ship sponsored by the University of Pittsburgh, Pennsylvania, carrying 600 university students from the United States, arrived at the Port of Havana, Republic of Cuba, on 19 February 1999 for a three-day visit. The Republic of Cuba is the first destination on a 100-day semester cruise that includes Brazil, South Africa, Kenya, India, Malaysia, Vietnam, Hong Kong, the People’s Republic of China, and Japan. This is reportedly the largest number of students from the United States to visit the Republic of Cuba with authorization from the United States government since 1959. NEW ORLEANS SEEKS OFAC AUTHORIZATION TO PROVIDE DIRECT AIRLINE SERVICE TO CUBA- Responding to the requests of a substantial number of individuals of Cuban descent who reside in the State of Louisiana, a letter has been written to The Honorable Madeleine Albright, Secretary of State of the United States, and to The Honorable Robert Rubin, Secretary of the Treasury of the United States. The letter was signed by The Honorable John Breaux and The Honorable Mary Landrieu, members of the United States Senate; and by The Honorable William Jefferson, The Honorable Billy Tauzin, The Honorable Richard Baker, The Honorable James McCrery, and The Honorable John Crowley, all members of the United States House of Representatives. The letter requests that the Office of Foreign Assets Control (OFAC) license the New Orleans International Airport as a gateway for charter flights between the United States and the Republic of Cuba. Currently, virtually all charter flights between the United States and the Republic of Cuba must transit through Miami International Airport in Miami, Florida. On 5 January 1999, The Honorable William J. Clinton, President of the United States, announced that the OFAC would license additional cities from which direct airline service between the United States and the Republic of Cuba could operate. United States-based airline charter companies in Newark, New Jersey, and in San Francisco, California, are also reportedly seeking OFAC licenses. US$8 MILLION WATERWORKS JOINT VENTURE ESTABLISHED- Barcelona, Spain-based Aguas de Barcelona, the largest privately-held water company in Spain, has established a joint venture with Republic of Cuba government-operated Instituto Nacional de Recursos Hidraulicos (INRH) to upgrade the water supply to more than 50% of the city of Havana’s 2.5 million residents. Aguas de Barcelona S.A. is partly owned by Bilbao, Spain-based Banco Bilbao Vizcaya S.A., the second-largest commercial bank in Spain, which has a representative office in Havana, Republic of Cuba. The joint venture, which has a duration of twenty-five years, has initial capital of US$8 million, will be 50% owned by Interagua (a subsidiary of Aguas de Barcelona which is 35% owned by Madrid, Spain-based Endesa S.A., the largest power company in Spain and 15% by Madrid, Spain-based Argentaria S.A., the third-largest commercial bank in Spain) and 50% by Instituto Nacional de Recursos Hidraulicos. Endesa S.A. and Argentaria S.A. each engage in commercial transactions within the Republic of Cuba. Interagua is to provide a loan of US$24 million to the joint venture. The joint venture agreement includes plans to establish a company to manage and to expand existing joint venture water supply projects in the resort areas of Varadero and Cayo Coco, 140 kilometers and 400 kilometers, respectively, east of Havana. Interagua is the largest shareholder in San Diego, California-based Western Water Company, a water wholesaler. BANCO BILBAO VIZCAYA POSITIONED FOR PUERTO RICO/CUBA BUSINESS- Bilbao, Spain-based Banco Bilbao Vizcaya, S.A., the second-largest commercial bank in Spain, received authorization in 1995 from the government of the Republic of Cuba to establish a representative office in the city of Havana, Republic of Cuba. An office was established in April 1996. With five employees, all Republic of Cuba nationals, under the direction of Mr. Jose Pastor, Banco Bilbao Vizcaya S.A., has provided, directly and indirectly, financing for sugar, rice, and other commercial transactions. Since 1996, such financing has focused upon government projects, along with joint ventures. Banco Bilbao Vizcaya S.A., has one branch office in New York City, New York; one agency (no deposits accepted from Republic of Cuba nationals) in Miami, Florida; and one branch office in San Juan, Puerto Rico. Banco Bilbao Vizcaya, S.A., owns San Juan, Puerto Rico-based BBV de P.R., the third-largest commercial bank in Puerto Rico, with forty-seven branches throughout the island. Puerto Rico has a large population of individuals of Cuban descent. PROCTER & GAMBLE, CATERPILLAR, AND SMITHKLINE BEACHAM SUPPORT HARVARD PROJECT- In what may be the largest single-group visit by United States-based graduate school students to the Republic of Cuba, Cambridge, Massachusetts-based Harvard Business School is organizing a 6 March 1999 to 14 March 1999 visit by approximately 100 graduate school students. Cincinnati, Ohio-based The Procter & Gamble Company (1998 revenues exceeding US$37 billion); Peoria, Illinois-based Caterpillar, Inc. (1998 revenues exceeding US$18 billion); and Brentford, Middlesex, United Kingdom-based SmithKline Beacham plc (1998 revenues exceeding US$10 billion) have committed a combined US$40,000.00 to underwrite partial costs of the visit. For additional information, contact Mr. Adrian H.B. Fopp at telephone: (617) 493-5458, facsimile: (617) 923-9473, or by E-mail at: afopp@mba1999.hbs.edu SALOMON SMITH BARNEY FROM “SELL” TO “NEUTRAL” ON SOL MELIA- Mr. Miguel Canoves, Director of the Cuba Division of Madrid, Spain-based Gupo Sol Melia S.A., reported that gross revenues from the twelve hotels currently operated by Sol Melia throughout the Republic of Cuba would be US$153 million in 1999. Sol Melia S.A. receives a percentage of the gross revenues that varies from property to property, depending upon whether the company has a) a management contact b) an equity interest in the property or c) a combination of a management contract and an equity interest in the property. Mr. Canoves said that an additional six hotels were under construction, with plans to have a total of twenty-two hotels operating within the next two to four years; and that Sol Melia S.A. viewed its properties within the Republic of Cuba has the “most promising” of its non-Spain-based properties. Sol Melia S.A. is an equity partner in some of the hotels that it also manages within the Republic of Cuba. Sol Melia S.A. is an investor in some hotels within the Republic of Cuba with Toronto, Canada-based Sherritt International Corporation (the largest non-Republic of Cuba-based, Republic of Cuba-focused company with investments and operations within the Republic of Cuba). Sol Melia S.A. manages 246 properties in 24 countries. On 4 February 1999, Mr. Ivor Jones, an analyst at New York City, New York-based Salomon Smith Barney Holdings, Inc., changed his recommendation of Sol Melia S.A. from “sell” to “neutral.” Individuals subject to United States law reportedly hold approximately 20% of the publicly traded shares of Sol Melia S.A., such investments being authorized by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. Salomon Smith Barney Holdings, Inc., (1998 assets exceeding US$400 million) is a subsidiary of New York City, New York-based Citigroup, Inc. (1998 assets exceeding US$500 billion). In 1998, New York City, New York-based Citibank N.A., a subsidiary of Citigroup, announced that it would purchase the 104-branch Buenos Aires, Argentina-based Banco Mayo Cooperativo. The purchase included Banco Mayo Cooperativo’s credit card operations. Also in 1998, Citibank N.A. purchased the 250-branch Monterrey, Mexico-based Banco Confia and said that the purchase would not preclude Mexican nationals who hold Visa credit cards and Mastercard credit cards issued by Banco Confia from using those products within the Republic of Cuba. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., permits individuals not subject to United States law to use Visa credit cards and Mastercard credit cards for transactions within the Republic of Cuba provided that the Visa credit cards and Mastercard credit cards are not issued by United States-based financial institutions. While Banco Confia is not a United States-based financial institution, Banco Confia is now 100% owned by a United States-based financial institution. LEISURE CANADA SEEKING UNITED STATES FINANCIAL PUBLIC RELATIONS ASSISTANCE- North Vancouver, British Columbia, Canada-based Leisure Canada, is speaking with at least one United States-based financial public relations company about representation which would expectedly result in an increase in the visibility of Leisure Canada within the United States financial community. An increasing number of Canada-based companies with Republic of Cuba-related commercial activities are retaining United States-based legal counsel, retaining United States-based consultants, and becoming members of United States-based organizations. Leisure Canada, through its Wilton Properties subsidiary, plans to invest approximately US$400 million to develop within the Republic of Cuba hotels, marinas, golf courses, equestrian riding centers, cruise ship facilities, tennis courts, convention centers, health spas, retail facilities, and eco-tourism facilities in conjunction with Republic of Cuba government-operated Gran Caribe S.A., one of the three largest Republic of Cuba government-operated tourism companies. Other investors in Leisure Canada include Paris, France-based Societe General and Paris, France-based LCF Rothschild. Leisure Canada reports no current revenues from operations within the Republic of Cuba, but expects that within the next two years more than 51% of its revenues will be from operations within the Republic of Cuba. Leisure Canada also has a 20% interest in Saskatchewan, Canada-based Points North Digital Technologies, which, in turn, owns Mississauga, Canada-based TravelPlus, one of the three largest travel agencies (more than 200 locations) within Canada, and Dallas, Texas-based International Tours, with 1,100 locations throughout the United States. In 1997, San Francisco, California-based BancAmerica ROBERTSON STEPHENS Investment Management, an investment banking company with assets of US$2 billion specializing in emerging growth companies, purchased a 26.2% (fully diluted) investment in Leisure Canada. ROBERTSON STEPHENS Investment Management announced in November 1998 that it was being purchased by a group of investors, which includes the company’s original founders. BancAmerica ROBERTSON STEPHENS is a subsidiary San Francisco, California-based BankAmerica Corporation (which recently merged with Charlotte, North Carolina-based NationsBank Corporation, the new entity having combined assets of US$572 billion). The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba. [OFAC 4 March 1994]. USCTEC INTERNET “HITS” INCREASE 400% ON ONE DAY- Coinciding with publication of an article (see attached) in The Miami Herald newspaper on 1 February 1999, “hits” to the Internet site of the U.S.-Cuba Trade and Economic Council increased by approximately 400% during that day. The article mentioned the address of the Internet site, http://www.cubatrade.org. ARCHER DANIELS MIDLAND COMPANY ANNOUNCES 100 TON DONATION AND PLANS FOR SALES- On 5 January 1999, Decatur, Illinois-based Archer Daniels Midland Company (ADM), a member of the U.S.-Cuba Trade and Economic Council, announced that the company had donated 100 metric tons of powered soy beverage for distribution to children within the Republic of Cuba. According to the United States Department of Commerce, this is one of the largest-ever single donations of food product to the Republic of Cuba by a United States-based company. ADM received a license promptly from the Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., to authorize the shipment by sea of five, 40-foot containers to Republic of Cuba. Mr. Dwayne O. Andreas, Chairman of ADM, said “This donation is a gift to the children of Cuba from the 23,000 employees of ADM. Our company believes that every effort should be made to assist those who do not have the extraordinary bounty that we have in this country. This is especially true when speaking about children.” Mr. Andreas continued, “With yesterday’s announcement by Secretary of State Madeleine Albright that United States companies will now be able to sell food products to the Republic of Cuba, ADM expects to quickly seek a license to sell United States-produced food products to the Republic of Cuba. Last month, ADM received an inquiry on behalf of an entity in the Republic of Cuba for a substantial quantity of products.” The donation by ADM will be distributed within the Republic of Cuba through Caritas Cubana, a non-governmental organization operated by the Roman Catholic Church. Assisting with the coordination of the donation were His Excellency John Cardinal O’Connor, Archbishop of New York; The Honorable Charles B. Rangel (D-New York), a member of the United States House of Representatives; and the U.S.-Cuba Trade and Economic Council. The products donated by ADM to the Republic of Cuba are: 1) WMR1, an alternative to whole or filled milk powder for utilization in nutritional beverages formulated to provide equivalent protein, carbohydrate, fat, mineral, and vitamin levels as whole milk powder. The nutrients and protein composition contained in WMR1 exceeds the FAO/WHO/UNU requirement of amino acids for preschool children. 2) WMR4 is a lactose-free, all vegetable nutritional powder product designed to be used as an extender for whole milk powder. Nutritionally, WMR4 contains protein, fat, carbohydrates, calories, minerals, and vitamins in levels similar to those found in whole milk powder. ADM is engaged in the business of procuring, transporting, storing, processing, and merchandising agricultural commodities and products. ADM is one of the world’s largest processors of oilseeds, corn, and wheat. Other operations include grain storage, peanut shelling, cocoa processing, and the production of consumer food products. Annual global revenues exceed US$16 billion. PRESIDENT CLINTON ANNOUNCES COMMERCIAL POLICY CHANGES TOWARD CUBA- On 5 January 1999, The Honorable William J. Clinton, President of the United States of America, announced substantial changes in United States commercial policy toward the Republic of Cuba. Some of the initiatives were authorized by the Cuban Democracy Act when signed into law by then President George H.W. Bush in October 1992.
2) Authorization for the issuance of licenses from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and from the Bureau of Export Administration (BXA) of the United States Department of Commerce for United States-based companies to sell farm equipment (tractors, plows, silos, etc.) to certain entities within the Republic of Cuba. The entities include small private farmers, non-governmental organizations (NGO’s), and, reportedly, Basic Units of Cooperative Production (Unidades Basicas de Produccion Cooperativa), known as the UBPC. 3) Authorization for the issuance of licenses from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and from the Bureau of Export Administration (BXA) of the United States Department of Commerce for United States-based companies to sell agricultural products (fertilizer, pesticides, seeds, etc.) to certain entities within the Republic of Cuba. The entities include small private farmers, non-governmental organizations (NGO’s), and, reportedly, Basic Units of Cooperative Production (Unidades Basicas de Produccion Cooperativa), known as the UBPC. 4) Authorization for the issuance of licenses from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and from the Bureau of Export Administration (BXA) of the United States Department of Commerce for United States-based companies to sell farm supplies (such as fencing, clothing, etc.) to certain entities within the Republic of Cuba. The entities include small private farmers, non-governmental organizations (NGO’s), and, reportedly, Basic Units of Cooperative Production (Unidades Basicas de Produccion Cooperativa), known as the UBPC. 5) Authorize the re-establishment of direct mail service between the United States and the Republic of Cuba. Currently, letters sent from the United States to the Republic of Cuba and letters sent from the Republic of Cuba to the United States are routed through Canada and through Mexico, resulting in delivery times ranging from ten days to sixty days. Direct mail service between the United States and the Republic of Cuba was suspended in 1963. Currently, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury licenses United States-based companies (mainly in Florida and New Jersey) to provide humanitarian (clothing, food, medicine, etc.) package delivery services to individuals residing within the Republic of Cuba. These packages are sent from the United States to the Republic of Cuba using the regularly-scheduled charter airline flights at costs of up to US$2.00 per pound plus a service fee. In addition, packages may be sent from the United States to the Republic of Cuba using the services of Redwood City, California-based DHL Worldwide Express under the following conditions: a) only documents may be sent, including video tapes, music tapes, books, magazines, etc. b) there are no quantity limitations per package and c) that the shipments may be addressed to residences and to offices. DHL Worldwide Express delivers packages between the United States and the Republic of Cuba through Mexico. DHL Worldwide Express has an operational agreement with the Ministry of Communications of the Republic of Cuba for the delivery and pick-up of packages within the Republic of Cuba. DHL Worldwide Express delivered to the Republic of Cuba and sent from the Republic of Cuba a total (to all countries serviced) of more than 100,000 packages in 1998. Atlanta, Georgia-based United Parcel Service of America (1998 revenues exceeding US$22 billion) and Memphis, Tennessee-based FDX Corporation (1998 revenues exceeding US$15 billion) do not yet offer package delivery services between the United States and the Republic of Cuba. Currently, United States-based companies seeking to export (sales and donations) products (healthcare products, informational materials, brochures, catalogs, books, magazines, newspapers, music products, motion picture products, television products, artwork, etc.) to the Republic of Cuba must use the regularly-scheduled airline charter flights which charge up to US$2.00 per pound for cargo. In addition, United States-based companies must pay for the transportation of any product to Miami, Florida, and for the services of a freight forwarder. Often, the costs associated with shipping a product from the United States to the Republic of Cuba are greater than the value of the product being shipped. The same excessive costs are associated with products being imported to the United States from the Republic of Cuba including informational materials, brochures, catalogs, books, magazines, newspapers, music products, motion picture products, television products, artwork, etc. 6) Expand
existing regularly-scheduled airline charter flights between
the United States and the Republic of Cuba. Currently, the flights
operate only between Miami, Florida’s Miami International Airport and
Havana, Republic of Cuba’s Jose Marti International Airport. The
flights are operated by Fort Lauderdale, Florida-based Gulfstream International
Airlines (using Dash-7 turboprop aircraft and Beechcraft 1990-R turboprop
aircraft) and Miami, Florida-based Airline Brokers Company (which charters
aircraft from Elk Grove Township, Illinois-based United Airlines, including
Boeing 777 aircraft). Additional flights will be permitted from
cities within the United States (to include Newark, New Jersey; New
Orleans, Louisiana; and Los Angeles, California among others) to cities
within the Republic of Cuba (to include Holguin, Santiago de Cuba, and
Camaguey among others). The Office of Foreign Assets Control (OFAC)
of the United States Department of the Treasury has issued Carrier Service
Provider (CSP) licenses to 12 United States-based companies, eleven
of which are located in the State of Florida and one is located in the
State of Texas (Dallas, Fort Worth Airport-based American Airlines,
Inc.). The OFAC has come under criticism (and threatened legal
action) from United States-based companies for delays of almost twelve
months in the processing of license applications for CSP’s and Travel
Service Provider’s (TSP). The criticism is primarily a result
of the OFAC not issuing complete uniform application guidelines and
continually requesting information that, in some cases, had already
been provided to the OFAC earlier in the application process.
New York City-based American Express Travel Related Services, Inc.,
a subsidiary of New York City-based American Express Company (1998 assets
exceeding US$100 billion), has a TSP license from the OFAC. 8) Increased people-to-people contact: a) cultural exchanges such as the reported two-game series in the city of Baltimore and in the city of Havana between the Baltimore Orioles baseball team and the National Team of the Republic of Cuba b) academic exchanges c) athletic exchanges and d) scientist exchanges. President Clinton said that the licensing and visa process to facilitate the people-to-people contact would be “streamlined.” The existing process has received increasing criticism, specifically for a continuing lack of timely responses from the Office of Cuban Affairs of the United States Department of State for the issuing of travel visas for Republic of Cuba nationals and from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury for the issuing of licenses to engage in related financial transactions. The OFAC authorizes Republic of Cuba nationals to perform in the United States provided that they only receive a per diem and travel expenses. Republic of Cuba nationals are not authorized by the OFAC to receive fees from ticket sales, endorsements, etc. Republic of Cuba nationals are authorized by the OFAC to receive revenues from the sales of recordings sold within the United States. United States-based music promoters have criticized the OFAC and the United States Department of State (which determines the policy guiding the regulations administered by the OFAC) for restraining the ability of Republic of Cuba nationals to perform in larger venues within the United States and to retain some of the ticket revenues, which many of the performers confirm that they would use to purchase equipment. The Republic of Cuba has a national income tax which does include specific income tax rates for Republic of Cuba nationals earning all or a portion of their income in U.S. Dollars. Some promoters are increasingly confident that with Cuban music becoming more popular- especially in the states of Florida, New Jersey, Texas, and California, performers such as Manolin- “El Medico de la Salsa” and groups such as “Los Van Van” could tour venues with 10,000 seats to 20,000 seats. The Milwaukee, Wisconsin-based Milwaukee Symphony Orchestra is reportedly seeking an OFAC license to perform two concerts in the Republic of Cuba at the end of 1999. CUBA FARM STRUCTURE
UPDATE- Farms within the Republic of Cuba are divided into four categories:
1) Republic of Cuba government-operated farms 2) small private
farms 3) private cooperatives and 4) Basic Units of Cooperative
Production (Unidades Basicas de Produccion Cooperativa), known as the
UBPC. The small private farms and the private cooperatives own their
land, while the UBPC, which were established by the government of the
Republic of Cuba in 1993 and in 1994 from some Republic of Cuba government-operated
farms, own everything but the land, which is granted to them by the government
of the Republic of Cuba on an indefinite basis solely for farming.
All four categories of farms must purchase all of their supplies from
Republic of Cuba government-operated entities and are required to sell
75% or more of their total production to the government of the Republic
of Cuba at prices established by the government of the Republic of Cuba.
The remainder of their production may be used for their own consumption
and/or for sale at Republic of Cuba government-operated agricultural markets,
where prices are relatively established by supply and demand within guidelines
established by the government of the Republic of Cuba. The government
of the Republic of Cuba requires all private home-based restaurant (known
as “paladares”) owners and Republic of Cuba national landlords who provide
meals for their renters to purchase all food products from Republic of
Cuba government-operated retail stores or from Republic of Cuba government-operated
agricultural markets. The 125,000 small private farmers that till
10% of the Republic of Cuba’s arable land are organized into credit and
service cooperatives for the purpose of contracting credits and services
from the government of the Republic of Cuba and to sell their products
within the Republic of Cuba government-operated agricultural markets.
The small private farmers, along with the private cooperatives, are members
of the Republic of Cuba government-operated National Small Farmers Association.
The 1,164 private cooperatives tilling 12% of the Republic of Cuba’s arable
land have 63,000 members. The approximately 3,000 UBPC’s tilling
43% of the Republic of Cuba’s arable land have 220,000 members.
Republic of Cuba government-operated farms till 35% of the Republic of
Cuba’s arable land and produce sugar, milk, and vegetables, potato, banana,
pork, eggs, and rice, among other products. The 3,000 UBPC’s
are evenly divided between sugar and non-sugar agriculture, while the
small private farms and private cooperatives produce products for both
domestic consumption and for export.
Republic of Cuba
government-operated Alimport, responsible for importing bulk food commodities
for distribution to the Cuban population, and which is affiliated with
the Ministry of Foreign Trade of the Republic of Cuba, provided the following
information for bulk food commodity imports to the Republic of Cuba in
1995, some of which is inconsistent with the above-referenced information
officially reported by the government of the Republic of Cuba.
CUBAN GOVERNMENT RESPONDS (INITIALLY) TO UNITED STATES COMMERCIAL POLICY CHANGES- H.E. Ricardo Alarcon, President of the National Assembly of People’s Power of the Republic of Cuba, gave a live two-hour televised address at 9:30 p.m. on 8 January 1999 during which he responded (initially) officially on behalf of the government of the Republic of Cuba to the 5 January 1999 initiatives toward the Republic of Cuba announced by The Honorable William J. Clinton, President of the United States. In order not to interfere with the most popular television program (a soap opera from Colombia) aired throughout the Republic of Cuba from 9:15 p.m. to 10:00 p.m., the government of the Republic of Cuba broadcast the soap opera from 8:45 p.m. to 9:30 p.m. President Alarcon said that the government of the Republic of Cuba would 1) accept the resumption of direct mail service with a guarantee from the government of the United States that security could be maintained to prevent explosives from being sent. 2) accept increased “people to people” contact. 3) consider an increase in Republic of Cuba destinations for airline charter flights. 4) rejects the change in the policy regarding remittances. 5) rejects the change in policy to sell food products, sell farm equipment, sell agricultural products, and sell farm supplies. Republic of Cuba-based diplomats believe that compromises will be reached between the government of the Republic of Cuba and the government of the United States to implement some of the initiatives consistent with existing legal structures within the Republic of Cuba. CUBAN GOVERNMENT QUESTIONS REASON FOR DELAY OF U.S. HEALTHCARE/MEDICAL EXPOSITION- H.E. Ricardo Alarcon, President of the National Assembly of People’s Power of the Republic of Cuba, during his live two-hour televised address at 9:30 p.m. on 8 January 1999 during which he responded (initially) officially on behalf of the government of the Republic of Cuba to the 5 January 1999 initiatives toward the Republic of Cuba announced by The Honorable William J. Clinton, President of the United States, specifically mentioned the U.S. Healthcare/Medical Exposition for which Westport, Connecticut-based PWN Exhibicon International L.L.C., received the first license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to organize in the city of Havana. PWN Exhibicon International L.L.C., actually received three planning licenses from the OFAC. President Alarcon questioned the logic of the United States government in granting licenses to plan for the event but not yet permitting the event to take place within the Republic of Cuba, even after approximately 200 United States-based healthcare companies had expressed their interest in having representatives participate in the event. Individuals qualified to participate in the event remain expected to include executives and representatives from United States companies that manufacture, distribute, market, and retail, health care sector informational materials, medical equipment, medical instruments, medical supplies, medicated products, medicines, and pharmaceuticals. In March 1998, after receiving the third OFAC license necessary to organize the event, Mr. Peter W. Nathan, President of PWN Exhibicon International L.L.C., with forty-two years of experience in the exhibition industry, and who previously organized the first trade shows for United States companies which were held within the People’s Republic of China and within the former U.S.S.R., said that “the Clinton Administration has responded to the increasing desire of the United States business community to identify opportunities within the health care sector in Cuba. There is no better cost-effective method to achieve tangible results than through a trade fair where thousands of people can interact with one another in one place at one time. The Clinton Administration spent more than one year evaluating the proposal, after denying our first request for an OFAC license to organize a trade show in 1997. Their change in attitude is welcomed.” PWN Exhibicon International L.L.C. is also identifying trade show opportunities within Cuba for United States companies in entertainment, telecommunications, publishing, and other sectors. For information regarding trade show participation, sponsorship, and costs, please contact telephone (203) 222-8660 or facsimile (203) 222-8335. USCTEC INTERNET “HITS” INCREASE 200% LAST WEEK- Due to the announcement by The Honorable William J. Clinton, President of the United States, with respect to the Republic of Cuba, the Internet address of the U.S.-Cuba Trade and Economic Council, http://www.cubatrade.org, had a daily usage increase exceeding 200% for the period 5 January 1999 through 8 January 1999. BET SELLING COMMERCIAL TIME FOR INTERVIEW WITH PRESIDENT CASTRO- Washington, D.C.-based Black Entertainment Television, Inc., (BET) will air a one hour previously-taped interview with H.E. Dr. Fidel Castro Ruz, President of the Republic of Cuba, on the program “BET Tonight” hosted by Mr. Tavis Smiley, at 11:00 p.m. (EST) on Thursday, 28 January 1999. BET reports that the program will reach 55 million households. BET is offering a rate of US$3,500.00 per 30-second commercial for a package of four (4) commercials that will include two (2) 5-second open and close billboards denoting program sponsorship. Purchasers of the package will also receive an advertising discount (US$2,500.00 per commercial and two 5-second open and close billboards denoting program sponsorship) on any rebroadcast of the interview with President Castro. For additional information, contact Mr. Elverage D. Allen at BET. The telephone number is (312) 819-8600 and the facsimile telephone number is (312) 819-8684. CLUB MED EXCLUDES CUBA FROM ADVERTISEMENT IN THE NEW YORK TIMES- Paris, France-based Club Mediterranee S.A., did not include mention of its property within the Republic of Cuba within the text of a two-page advertisement listing its other properties in The New York Times on 17 January 1999. Since 1997, Club Mediterranee S.A. has managed a 266-room property in the resort area of Varadero, 140 kilometers east of the city of Havana. The property is owned by Gaviota S.A., which is a affiliated with the Revolutionary Armed Forces of the Republic of Cuba. The Club Med II, one of the largest passenger (439) sailing vessels in the world, which is operated by Club Mediterranee S.A., first visited the Republic of Cuba in February 1998 and is expected to return in 1999. Madrid, Spain-based Iberia Airlines included mention of its service to the Republic of Cuba in an advertisement in The New York Times on 1 July 1998 which showed a map that included two routings between Spain and the Republic of Cuba (city of Havana and resort area of Varadero). The text of the advertisement said that Iberia is “working with American Airlines” and its customers can access “... anywhere American Airlines flies in the U.S. to any of Iberia’s 95 worldwide destinations.” Dallas Fort Worth, Texas-based American Airlines, Inc., and Hounslow, Middlesex, United Kingdom-based British Airways have a combined 10% share in Iberia Airlines. British Airways, which is seeking to establish a global marketing alliance with American Airlines, is scheduled to begin service from the United Kingdom to the Republic of Cuba in 1999. DAIMLERCHRYSLER ESTABLISHES SIXTH SERVICE CENTER- MCV Comercial S.A., a joint venture between a Middle East-based subsidiary of Stuttgart, Germany-based DaimlerChrysler AG and Republic of Cuba government-operated Unecamoto, a division of the Ministry of Steel, Mechanical and Electronic Industry (SEME) of the Republic of Cuba, have established a sixth service center within the Republic of Cuba. The newest service center is in the city of Santiago de Cuba, 850 kilometers east of the city of Havana. The service centers provide support for an increasing number of Mercedes-Benz cars, Mercedes-Benz vans, Mercedes-Benz trucks, Mercedes-Benz buses, and vehicles equipped with Mercedes-Benz engines, in use throughout the Republic of Cuba. The service centers sell Mercedes-Benz motors, Mercedes-Benz gear boxes, and other Mercedes-Benz vehicle parts. Mr. Karim Ghabbour, President of MCV Commercial said that Mercedes-Benz vehicles and Mercedes-Benz engines were increasingly present in the tourism, sugar, construction, and other industries. MCV now has service centers in the cities of Havana, Santa Clara, Santiago de Cuba, Camaguey, Holguin, and in the resort area of Varadero. MEGANET CORPORATION INCLUDES CUBA IN PATENT FILING- Tarzana, California-based Meganet Corporation has included the Republic of Cuba in its 72-country Patent Cooperation Treaty (PCT) application to the World Intellectual Property Organization (WIPO) in Geneva, Switzerland. The application, once approved, will protect the rights of Meganet Corporation to file a national application at a later date to protect its patent within the Republic of Cuba. The PCT application process reportedly takes thirty months. Meganet Corporation is seeking to protect its Virtual Matrix Encryption (VME) technology, which, according to the company, is the "strongest available encryption technology in the market." FORD MOTOR COMPANY PURCHASE OF VOLVO OPERATIONS NOT EXPECTED TO IMPACT CUBA- Dearborn, Michigan-based Ford Motor Company (1998 revenues exceeding US$153 billion) announced that the company is purchasing the automobile operations of Goteborg, Sweden-based AB Volvo for approximately US$6.4 billion. According to executives at Ford Motor Company and at AB Volvo, agreements within the Republic of Cuba and sales of vehicles to the Republic of Cuba are not affected by the sale of the automotive division. 1) The Volvo Penta subsidiary of AB Volvo announced 31 October 1998 that it had established a joint venture, Unevol S.A., with Republic of Cuba government-operated Unecamoto (the vehicle division of the Ministry of Steel, Mechanical and Electronic Industry of the Republic of Cuba, known as SIME) to re-motorize and to service heavy transportation equipment. Volvo Penta controls 60% of the joint venture and Unecamoto controls 40% of the joint venture. Mr. Alfredo Uguet, President of Unevol S.A., said that the company was well financed, equipped with the latest technology, and would operate within the Republic of Cuba and within other countries. Mr. Roberto Maqueira, Technical Director of Unevol S.A., said that the company would replace inefficient U.S.S.R.-designed motors with Volvo-designed diesel motors, with U.S.S.R.-designed military trucks the first to be overhauled. He said that many Republic of Cuba government-operated tourism companies were using Volvo engine-powered buses, vans, and other types of vehicles, as was the city of Havana for its bus services; and that locomotives and ships could also benefit from installing Volvo-designed motors, with installation costs being recouped within one year due to lower fuel consumption and less maintenance. The Unevol S.A. executives said that future plans include vehicle assembly and a nationwide service network. 2) Since 1995, the Ministry of Transportation of the Republic of Cuba has operated Rex, an “authorized Volvo workshop agent” which rents Volvo vehicles within the Republic of Cuba. A Volvo 940 GL is US$150.00 per day (150 kilometers free, US$.60 each additional kilometer) plus US$25.00 for insurance. A chauffeured Volvo 940 GL is US$220.00 per day (150 kilometers free, US$.60 each additional kilometer), including insurance. A chauffeured Volvo 960 limousine is US$325.00 per day (150 kilometers free, US$.60 each additional kilometer), including insurance. 3) European companies including AB Volvo; Paris, France-based Peugeot; Paris, France-based Citroen; Stuttgart, Germany-based DamilerChrysler AG; and Turin, Italy-based Fiat S.p.A., have been competing to place their motors in tens of thousands of Republic of Cuba-based heavy transportation vehicles, and to sell buses, vans, and other vehicles to the tourism industry. Three years ago, Daimler-Benz AG (the predecessor to DaimlerChrysler AG) received a contract to replace the motors in approximately 2,500 sugar cane-cutting combines, trucks, and tractors. In 1996, Daimler-Benz AG and Unecamoto established MCV Comercial S.A., which is similar to Unevol S.A. Other non-Republic of Cuba-based vehicle companies (including Toyota City, Japan-based Toyota Motor Corporation) have contracts to provide vehicles to various Republic of Cuba ministries and to Republic of Cuba government-operated companies, but have not established joint ventures nor obtained heavy transportation machinery contracts. THE BANK OF NEW YORK, GOLDMAN, SACHS & CO., BT WOLFENSHON ASSISTING ENDESA S.A.- Madrid, Spain-based Endesa S.A. (NYSE: ELE) announced that it had commenced tender offers valued at a combined US$1.45 billion in the United States and in Chile for 65% of the shares of common stock and American Depository Shares of Enersis S.A., the largest energy holding company in Chile. The Information Agency for the United States offer is New York City, New York-based D.F. King & Company, Inc.; the Receiving Agent for the United States offer is New York City, New York-based The Bank Of New York; The Dealer Managers for the United States offer are New York City, New York-based BT Wolfensohn and New York City, New York-based Goldman, Sachs & Co. 1) In June 1998, H.E. Josep Pique, Minister of Industry and Energy of Spain, reported that Endesa S.A. was “negotiating significant investments” within the energy sector within the Republic of Cuba, although no specific investment has yet to be formally announced. Endesa S.A. is a vertically integrated electric utility and the largest generator of electricity in Spain with a market share of approximately 47% (excluding independent producers) in 1997. Endesa S.A. is also the leading distributor of electricity in Spain, accounting for approximately 45% of electricity distribution in 1997. As part of its effort to pursue growth opportunities, Endesa S.A. has in recent years engaged in a program of international expansion in its core electricity business, with a particular focus on Latin America. Since 1997, Endesa S.A. acquired equity stakes in Enersis in Chile, CONDENSA and ENGESA in Columbia, and Companhia Energetica do Ceara in Brazil. As a result of these investments, Endesa S.A. is one of the largest international investors in the Latin American electricity sector. Within Spain, Endesa S.A. is pursuing a diversification strategy and has acquired interests in other utilities such as telecommunications, gas distribution, water distribution, renewable energies and cogeneration technologies. 2) Interagua, a subsidiary of Barcelona, Spain-based Aguas de Barcelona S.A. (Agbar), the largest privately-held water company in Spain, is the largest shareholder in San Diego, California-based Western Water Company, a water wholesaler. Interagua is partly owned by Endesa S.A. Agbar is working on the renovation of the water system in the city of Havana; and has worked on the renovation of the water system in the resort area of Varadero, 140 kilometers east of Havana; and in the surrounding areas of Varadero. 3) Baltimore, Maryland-based SITEL Corporation (NYSE: SWW) announced on 21 January 1999 the signing of a five-year agreement with Endesa S.A. to provide outsourced teleservices in Spain. SITEL Corporation is the global leader in providing outsourced telephone and Internet-based customer service and sales programs on behalf of corporations worldwide, operating more than 12,900 workstations in more than 70 call centers in 18 countries throughout North America, Europe, Asia-Pacific and Latin America, covers more than 25 languages and dialects, serves more than 400 clients and employs more than 19,000 people. SITEL Corporation will operate several call centers located in Barcelona, Spain, and in Seville, Spain, involving approximately 235 workstations and providing service to some major companies of Endesa S.A. The scope of the contract will include Customer Care and all incoming requests by consumers concerning meter readings, power failures, commercial campaigns, and switchboard handling. BALTIMORE ORIOLES PROPOSAL UPDATE- The Baltimore, Maryland-based Baltimore Orioles professional baseball team continues to seek an agreement with the government of the United States and with the government of the Republic of Cuba to play two exhibition games, tentatively-scheduled for the city of Havana on 28 March 1999 and the city of Baltimore on 3 April 1999. Thus far, an impasse remains with respect to how any profits (estimated to be less than US$200,000.00) would be distributed. The government of the United States believes that any distribution should be used for the benefit of the citizens of the Republic of Cuba. The government of the Republic of Cuba believes that any distribution should be used for the benefit of citizens within countries affected by hurricane Mitch. One suggested solution by an individual knowledgeable about the negotiations: “Pursue only one game at this time, to be played within Cuba, for which there would be no ticket sales. Everyone can attend for free. The Cuban government would broadcast the game throughout the Cuba with the provision that no commercial revenues are obtained from the broadcast. Any foreign media coverage of the game would be conducted as for any news event, just like the visit of the Pope. The game would not be broadcast in the United States. No special payments would be made by media organizations to the Cuban government to cover the event. With no revenues, the game would be strictly a cultural, non-commercial, people-to-people event, and, thus, removing everyone’s financial objections.”
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